After days of relentless selling, the British pound has finally found its footing in Asia, jumping more than one per cent against the US dollar.
The catalyst for the rebound, modest in comparison to the carnage seen in recent days, has come from the news that UK prime minister, Theresa May, has caved in to demands that the UK Parliament should be allowed to vote on her plan for taking Britain out of the European Union.
According to Bloomberg, Parliament will debate on Wednesday a motion from the opposition Labour Party calling for a “full and transparent debate on the government’s plan for leaving the EU” and for Parliament to be able to “properly scrutinise that plan” before she begins formal talks.
Some members of ruling conservative party backed the Labour motion, placing additional pressure on May to agree.
The report states that May tabled an amendment on Tuesday “that effectively accepted the motion, adding that there shouldn’t be an attempt to block Brexit or ‘undermine the negotiating position of the government'”.
With short positioning in the pound sitting at record levels, and having fallen by 4% in the past 5 days, the GBP/USD has surged in Asian trade, rising to as high as 1.2289 as traders pared bets that a so-called “hard brexit” from the EU will eventuate.
It currently sits at 1.2254, up 1.13%.
Here’s the spectacular 5-minute chart from today:
And here’s the daily chart, providing some perspective on how far pound has fallen since the June 23 EU referendum:
You can read more from Bloomberg here.