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Sterling Pushes Higher After MPs Grab Control of Brexit

Investing.com -- Sterling is center stage again Tuesday morning in Europe after U.K. lawmakers voted on Monday night to take control of the Brexit process from the government of Prime Minister Theresa May.

The development, made possible by a large-scale rebellion against May by her own party colleagues, paves the way for a series of votes on Wednesday on alternatives to the Withdrawal Agreement that she negotiated with the European Union.

The alternatives are likely to include a softer or delayed Brexit and, possibly, the cancellation of it altogether, but it is still far from clear what options can command a majority in parliament.

The pound’s reaction so far has been only moderately positive, as markets have been anticipating a softer Brexit since the Withdrawal Agreement was rejected by parliament in January.

At 04:00 AM ET (08:00 GMT), Cable was at $1.3203 and the pound was at 1.1675 against the euro, in both cases up around 0.2% from immediately before last night’s vote.

The dollar index, which measures the greenback against a basket of six major currencies, was little changed at 96.018.

The dollar has enjoyed a degree of support from the fact that special counsel Robert Mueller’s investigation into allegations of collusion between the Trump campaign and Russia in 2016 ended without any further charges being brought.

It faces further tests later Tuesday from the latest release of data on U.S. housing starts at 08.30 AM ET, and the Conference Board’s consumer confidence index, due at 10.00 AM ET.

A consumer confidence indicator from Germany released earlier Tuesday dipped to its lowest since May 2017, in a fresh reminder that the global slowdown is filtering through to the export-sensitive German economy.

Elsewhere, the Turkish lira has recovered nearly all of the losses it suffered last week, after the central bank moved to tighten conditions in the local money market. At 04:00 AM ET, it was at 5.5009 against the dollar.

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