MUFG Research discusses the latest Brexit vote developments.
"The pound has weakened modestly in response to the latest Brexit developments with cable falling back below the 1.3200-level and EUR/GBP rising further above support at the 0.8500-level. It reflects some initial disappointment that there is still no decisive break through to end the Brexit deadlock in parliament,"M MUFG notes.
"Overall, the end result is that Brexit uncertainty remains elevated and there is still no clear way forward to avoid a “No Deal” Brexit. It keeps downside risks in play for the pound. At the same time market participants can remain optimistic as well that Brexit could be both delayed for longer and softened if parliament support continues to shift in favour of a adopting a permanent customs union or holding a second referendum which would help to encourage a stronger pound. The lack of clarity should keep pound volatility elevated in the near-term," MUFG adds.