Britain’s pound held above $1.31 on Friday after recovering overnight when European Union leaders gave Prime Minister Theresa May a two-week reprieve to decide how Britain will leave the European Union.
Sterling had plunged towards $1.30 on Thursday in its biggest one-day fall of 2019 as fears mounted that Britain would crash out of the EU on March 29.
The pound was up 0.1% at against USD at 1.3117 by 0845 GMT, while its gains versus the euro were as high as 0.7 % to 1.1609 – largely on the back of weakness in the single currency following disappointing data out of Germany.
The EU has said Britain can have a short delay to Brexit, as requested by May, but she must first win parliamentary approval for her withdrawal deal that sets out the future relationship between London and its biggest trading partner.
May, however, has already lost two attempts to secure parliamentary support, and with the odds stacked against her for another vote next week the risk of a no-deal Brexit rose sharply.
The EU’s leaders have described the two-week extension as a “last chance” for Britain to secure an orderly Brexit. GBP is expected to be range bound with the latest headlines dictating its movement.