The pound is edging higher as vote on Theresa May's leadership upends possible Brexit outcomes
- Lawmakers from UK Prime Minister Theresa May's own party submitted a letter calling for her to stand down, triggering a no-confidence vote.
- The pound fell on the news, then edged higher in Wednesday morning trading as Brexit outcomes are thrown into question.
- "There is now a higher chance that we could see Article 50 delayed to allow the UK more time."
The pound whipsawed in early Wednesday trading, falling on news of a vote on Prime Minister Theresa May's leadership then recovering as investors weighed the impact on Brexit.
The pound hovered at $1.25, up 0.4% as of 9.52 a.m. in London. May said on Wednesday morning that she will contest any vote on her leadership "with everything I've got." Lawmakers from her own party submitted a letter calling for her to stand down, meaning that a no-confidence vote will soon be held on May's leadership.
That sent the pound lower Wednesday morning, edging higher and then holding steady as May said she will fight to persevere in executing the country's exit from the European Union.
While uncertainty in the government weighs on the currency, the potential for a delayed Brexit is positive for the pound.
"The question for the pound is not who the leader is per se, but what it means for Brexit," said Neil Wilson, Chief Market Analyst for Markets.com. "Huge instability will remain whatever the result of the confidence vote. The clock is ticking on a no-deal exit, although there is now a higher chance that we could see Article 50 delayed to allow the UK more time. More permutations than you can shake a stick at."
Read more: A no confidence vote has been triggered in Theresa May
Elsewhere in markets: global stocks rallied after President Donald Trump said he would intercede in the case of executive Meng Wanzhou, if such an extraordinary step could secure a favorable trade deal with China, Reuters reports.
The Euro Stoxx 50 was up almost 1% on Wednesday morning, following a 0.3% gain in the Shanghai Composite Index. S&P 500 futures are rallying 0.6%.
Trump said in an interview with Reuters, "Whatever's good for this country, I would do."
Huawei's CFO Meng was detained in Vancouver airport changing flights in on December 1, triggering an international incident that has unnerved markets and USA-China trade experts alike.
When asked if he would intervene with the Department of Justice in her case, the president indicated that he would if it led to a favorable outcome for national security interests and the signing of a trade deal with China.
"If I think it's good for what will be certainly the largest trade deal ever made - which is a very important thing - what's good for national security - I would certainly intervene if I thought it was necessary," Trump said.