GBP/NZD: EU Leaders Most Likely to Grant Brexit Extension

The British pound is looking more confident against the New Zealand dollar today. During the last few hours, the GBP/NZD pair has gained 0.36%, currently trading at 2.0175 as of 06.20 AM UTC.

Thus, the price has recovered part of the losses from this week, as the pair started has pointed downwards since Monday.

Given that there are no significant economic updates coming from New Zealand, GBP/NZD is now dependent on any Brexit-related news.

EU Leaders to Decide Whether to Give Another Brexit Extension

UK Prime Minister Boris Johnson is waiting for European leaders to decide for another Brexit extension after he failed to convince the UK parliament to support his deal. Instead, the parliament backed the Withdrawal Agreement Bill (WAB) in a preliminary voting yesterday but refused to accelerate the process.

Most officials agree that the most likely scenario is that the EU will green light another delay until the end of January next year.

However, according to a spokesman for the UK opposition, Johnson reportedly said in a private conversation with Labour Party Leader Jeremy Corbyn that French President Emmanuel Macron might veto another extension, which would force the UK out of the bloc by next Thursday with no deal. Nevertheless, this is a less likely scenario. In the worst case, France might demand only a shorter extension.

Ambassadors of the 27 EU countries are meeting these days to discuss the UK’s request for the extension. EU leaders might gather for a special summit to be held this Friday or Monday.

For Johnson, any delay beyond the current deadline of October 31 is humiliating, as he promised to end the Brexit drama by next Thursday. Yesterday, he had a phone call with German Chancellor Angela Merkel to reiterate his stance that Brexit shouldn’t be delayed, according to his spokesman James Slack.

European Council President Donald Tusk recommended leaders to support an extension until January 31. Most of EU leaders agree with him.

Bulgarian PM Boyko Borissov said during an interview:

“There is no chance that we don’t give them a chance. Imagine what will happen to the visa regime and to the customs union, to the common market.”

GBP/NZD might become more volatile later today after the Bank of England releases the minutes of the Financial Policy Committee’s recent meeting.

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