Sterling inched above five-month lows on Monday as British Prime Minister Theresa May makes a last-ditch attempt to get a Brexit deal through parliament before she leaves office, though scepticism from the opposition Labour Party capped gains.
After failing three times to get parliament’s approval for her EU divorce deal, May said she will present a “new, bold offer” to lawmakers with “an improved package of measures” in a final attempt to secure a Brexit deal.
Though there is broad scepticism that any such deal will go through, sterling did rise 0.3% higher against the dollar to $1.2754, though this is only after having dropped 2.2% last week, its worst week since October 2017.
The British currency was also up 0.2% against the euro on Monday at 87.51 pence.
“News reports suggest it’s a retread of old ideas and as long as that is the case, the market is going to be very sceptical,” said Rabobank FX strategist Jane Foley.
The leader of Britain’s opposition said he would not support May’s new attempt to push through her Brexit bill if it was fundamentally the same as the bill that had been defeated three times before.
This inability of the British parliament to compromise on Brexit has led the market to take a much more binary view on the outcome; divided between a so-called hard Brexit and a second referendum.
Adding to this feeling is a poll that showed Boris Johnson, a prominent leader of the Brexit campaign, as top choice among members of Britain’s ruling Conservative Party to replace May as prime minister.
“Clearly having him at the helm, would potentially increase the chances of a hard Brexit,” said Foley of Rabobank.