THE pound has dropped by up to 0.4 per cent against the euro and dollar after squabbling MPs rejected Theresa May’s Brexit deal for a third time today.
Sterling now sits at 1.6 against the euro, down from 1.69 yesterday.
It’s also weakened against the dollar following the result of the vote in the Commons, falling to 1.29 down from 1.31.
Michael Brown, senior analyst at investing firm Caxton FX said: “Political headwinds facing the pound have now increased, with Parliament now needing to find a consensus on a new way forward, likely through a second round of indicative votes on Monday increasing the prospects of a long extension.”
The drop in sterling wasn’t as dramatic as following the Prime Minister’s previous Brexit defeats but traders say this is down to investors scaling back their trading of the pound because it has become so difficult to predict.
They also warn that sterling is set to remain under pressure over fears the United Kingdom will leave the EU on April 12 without a deal.
The currency, which has fallen 1.9 per cent this month, is on track for its worst monthly performance since October 2018.
“The focus now shifts to the alternatives that parliament will decide on next week and everything from revoking Article 50 to having a second referendum vote is on the table which will weigh on the pound,” said Nikolay Markov, a senior economist at investment firm Pictet Asset Management.
The Commons defeated the PM’s bid to leave the EU on May 22 by 58 votes.
The Government is now likely to request a long delay to Brexit, lasting up to a year which casts huge doubt on whether we will ever even leave.
Mrs May’s loss also ramps up the chances of a snap election dragging Brits back to the polls for the third time in four years.
She hinted at this, saying; “I fear we are reaching the limits of this process”.
The uncertainty is also making it hard for holidaymakers to know when is the best time to get their holiday cash – now or after Brexit?
Hannah Maudrell, from Money.co.uk previously told The Sun: “Trying to predict what will happen to the exchange rate is near impossible.
“Currency markets don’t like uncertainty therefore exchange rates could rise or fall depending on the outcomes of the next few days.”
Experts reckon a good way to make sure you get the top rates is buying half of your money now and buy the other half after Brexit.
That way, you won’t feel so bitter if the pound weakens because you would have made the most of top rates when they were available.
We’ve put together a guide to where to get the best rates on your holiday cash.