After intense negotiations all week, the United Kingdom and the European Union have reached a Brexit agreement, thus turning the page to the next stage: UK Parliament approval. However, this is not an obstacle that will be easy to overcome. The British Prime Minister, Boris Johnson, does not have the majority guaranteed for the ratification of the pact.
The decision will be made this Saturday, then we will find out if an agreement has been made before the deadline that Johnson established for the United Kingdom’s departure from the European bloc.
“This agreement is a balanced commitment between the EU and the United Kingdom”. Said the President of the European Commission, Jean-Claude Juncker, after having a telephone conversation with the British Prime Minister.
This is the second pact both parties have reached and it comes with a negative precursor. The British Parliament rejected the first agreement three times after the request of two deadlines. In fact, the original plan was for Brexit to happen on March 31st.
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Voices against the preliminary deal
The Democratic Unionist Party (DUP) has refused to approve the agreement, and Johnson needs them to support the discussions with the European Union to ratify any pact reached. The leader of the Labour Party, Jeremy Corbyn, is also among those who will reject this agreement on Saturday.
Labour lawmakers told the press that they have been instructed to vote this Saturday in favour of a new referendum.
One of the tougher points of the negotiations involves the relationship between the United Kingdom and the Republic of Ireland. Attempts have been made to avoid a “hard border” on the island.
“These have been difficult discussions in recent days, but we have managed to find solutions that fully respect the integrity of the single market, resolve the issue of the hard border (in Ireland) and work for businesses and citizens of the EU and the United Kingdom”. European Union Negotiator, Michel Barnier, said at a press conference.
GBP/USD outlook ahead of the Parliament vote
Despite the hurdles which the deal has to jump on Saturday, the GBP/USD pair skyrocketed 1% across the board. However, during the American session, it fell back to test the 1.2870 neighborhood. This is likely to continue as rumors swirl ahead of the UK Parliament’s vote. If the pair breaks above 1.2900, the next hurdle will be 1.3000 (psychological area). On the flip side, the nearest support lies at 1.2800 and then, the lows from October 16.