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The pound sterling slid against the dollar as currency markets opened in Asia on Monday morning, following a crucial delay in Brexit's vote and a new request to extend the deadline.
The currency opened 0.6% at $ 1.2915, after closing slightly below the $ 1.30 mark on Friday, according to Reuters. Within an hour of trading, it reduced losses to trade 0.3% less.
The change in markets comes after a tough day for Brexit on Saturday. UK Prime Minister Boris Johnson was frustrated by a group of partisan politicians who voted to postpone the "significant vote" in his new divorce agreement and force him to ask Brussels for an extension of the current deadline of 31 December. October for Brexit.
Johnson reluctantly called for an extension of the deadline on Saturday night, but EU leaders need not necessarily accept it. This week, the government will present the complete Withdrawal Agreement bill and slowly try to approve it by the two chambers – the House of Commons and the House of Lords. A decisive and decisive vote by legislators is likely to take place at the end of the week.
Although Johnson lost the vote on Saturday, experts are still positive about Brexit. Deutsche Bank analysts said in a research note that "prospects for a Brexit resolution remain constructive," explaining that Saturday's voting composition really meant that Johnson could receive enough support for his deal at a later date.
The bank also said it "would maintain our constructive perspectives on the UK and long-term sterling and real recommendations."
Goldman Sachs, meanwhile, reduced the likelihood of a non-deal Brexit to 5% from 10% on Sunday, according to Reuters, maintaining the view that the country will leave the bloc on October 31.
The pound sterling had traded close to 1.50 against the dollar before the referendum in 2016, but dropped to about $ 1.29 when the result became clear. Then it spent the next few months pushing even harder and broke below $ 1.20 on some occasions. More recently, it is being negotiated close to five months with renewed optimism that the Johnson deal could pass.