Theresa May’s withdrawal agreement was roundly rejected in Britain’s House of Commons yesterday. Contrary to some commentators’ expectations, euro weakened on the result, as optimism was buoyed for an extension or even revocation of Article 50.
Today, the UK parliament will vote on leaving without a deal – a scenario which European leaders, particularly of heavily exposed countries like Portugal and Ireland, have repeatedly warned could have major impacts on certain sectors of their economies. If no-deal is rejected, then, on Thursday, they will vote on extending Article 50. In other words, there are almost completely opposing directions on the table at the moment, and the euro could go any which way.
Perhaps fortunately for European leaders, there’s little other economic data on the horizon today or tomorrow – the main focus really is what’s happening with Brexit. The European Council will meet on 21st March to discuss Brexit, but there is any number of scenarios which could happen before then.