If you’re having trouble keeping up with the drama of Brexit negotiations, the flow chart below from the Commonwealth Bank may be of interest, particularly if you are monitoring the impact on currencies.
It shows the various paths that Brexit negations could take in the months ahead, including the likely reaction in the British pound to each.
Near-term, the EU parliament will vote on the proposed withdrawal agreement on November 25.
That will be followed in early December by a separate vote on the same agreement by the UK House of Commons with the outcome, as yet, uncertain.
“Unless the UK Commons approve the withdrawal agreement and political declaration, the British pound will experience further broad-based downside pressure,” says Elias Haddad, Senior FX Strategist at the Commonwealth Bank.
“In such a situation, the only meaningful way to unlock the ensuing UK political paralysis would be to hold a new general election or a second Brexit referendum.”
Despite the uncertainty, Haddad believes the risk of a disorderly no-Brexit deal is “low”.
“It does not appear there is a majority of MPs in the House of Commons that would vote for a no-deal Brexit outcome,” he says.