Sterling holds above $1.32 with all eyes on Brexit developments

LONDON — The British pound rose back above $1.32 on Wednesday as investors eyed receding no-deal risks on another day of high drama in the long-running Brexit saga.

Europe’s stock markets turned higher in afternoon trading, while Wall Street also climbed at the opening bell.

Asian equities mostly rose but traders remain on edge about the global economic outlook, while Brexit continues to hog the headlines.

Britain’s Parliament was due to hold a series of so-called “indicative” votes to seek an alternative Brexit solution as pressure continued to mount on Prime Minister Theresa May to resign if she wanted her own unpopular plan approved.

Sterling had rallied on Tuesday on fresh hope that May would avoid a chaotic no-deal departure from the European Union. Yet, risks remain, according to Societe Generale analyst Kit Juckes.

As uncertain as ever 

Brexit horror-show/soap opera was due to start with debates from 2pm (14:00 GMT) on various options for the way forward as the House of Commons takes control from the government, Juckes said.

“What happens next is as uncertain as ever and one thing is clear — the foreign exchange market... is still seeing risk and positions taken off the table.”

MPs will now choose whether to cancel Brexit, hold another referendum, vote for a deal including a customs union and single market membership, or leave the EU without a deal, though the government is not bound by law to implement the decision.

In a fresh twist, May’s twice-rejected divorce plan could be revived after Brexit hardliner Jacob Rees-Mogg — one of her most vociferous and high-profile critics — said he would back it, while another, Boris Johnson, hinted that he also could.

Wednesday was another... big day in the Brexit process but the indicative votes were not actually going to take place until 7pm (19:00 GMT), meaning any reaction to the results will have to wait until Thursday morning, said Spreadex analyst Connor Campbell.

Alphabet soup 

“Most investors’ attention [is] on Westminster and an alphabet soup of parliamentary motions that could shape the future direction of the Brexit grid lock,” said CMC Markets analyst Michael Hewson.

Brussels has given London a new extended deadline of April 12 to get May’s deal ratified or find a new way out. That replaced the previous Brexit date of March 29.

“Though avoiding a swift but hard Brexit is good news for the pound, going into a protracted period of uncertainty would continue to damage domestic industries and the currency,” said City Index analyst Fiona Cincotta.