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Pound dramatically tanks as Theresa May postpones Brexit deal vote

Lianna Brinded
Head of Yahoo Finance UK
An employee is seen walking over a mosaic of pound sterling symbols set in the floor of the front hall of the Bank of England. Photo: Reuters

The pound against the dollar (GBPUSD=X) and euro (GBPEUR=X) tanked by about 1.5% on Monday as UK prime minister Theresa May called off a planned vote on her Brexit deal, which was scheduled for Tuesday.

It was widely forecast that the majority of members of parliament would vote against her deal, and so May delayed the vote and said she would go back to her counterparts in the European Union to discuss concerns about the Irish border and the so-called “backstop” solution.

Media reports claiming that May would delay the vote dragged the pound down to its lowest level in 18 months, to around $1.26 against the US dollar and €1.10 against the euro. It fell further after May formally called off the vote, down to about $1.25 against the dollar.

Chart: Yahoo Finance
Chart: Yahoo Finance

When looking at a longer term chart, the pound is now lower than what it was when Britain voted for Brexit in June 2016.

Chart: Yahoo FinanceMay has received strong backlash over the deal she secured with the EU — from the Labour opposition, the public, and even inside her own party.

Meanwhile, politicians within May’s party had been pushing a new message to try and ‘sell’ the deal. Britain’s foreign secretary Jeremy Hunt said that he believes the prime minister’s agreement with the EU was a “stepping stone,” suggesting that further amendments could be made.

However, in Brussels today, Yahoo Finance UK’s Brussels correspondent said that the EU commission “will not renegotiate the deal that is on the table right now.”

READ MORE: How the pound could fare after parliament’s crunch Brexit vote

Earlier today, the European Court of Justice declared that Britain can unilaterally revoke its withdrawal from the EU. The court found that if the UK does decide to revoke Article 50 and stop the Brexit process it would remain in the EU as a member state and the revocation must be decided following ‘democratic process.’

READ MORE: UK can revoke Brexit, European Court rules