The pound took a dive yesterday when it was announced that the EU was insisting on the Withdrawal Agreement being passed before a “short” extension could be considered. Although it fell around a cent against the euro, the fall did not continue after Theresa may outlined the stark choice of her deal or no deal at the subsequent statement in Downing Street. It remains to be seen whether (a) the EU will agree to the extension, (b) the procedural obstacles to the deal being presented to Parliament for a third time can be got round and (c) it will pass before the 29 March.
The pound also took an early hit this morning against the USD, but has, so far held on to the gains it made over the past week.
At midday today we have the Bank of England Monetary Policy Committee interest rate decision, although nothing is expected to change here. Unless there is some unexpected indication in the MPC minutes of future changes, it is really political decisions from the EU on extending Article 50 that will influence the pound.
