Prime Minister Theresa May is due to meet her European peers in Brussels later today in an attempt to negotiate Brexit extension.
It is expected she will ask for an extension beyond this Friday until the 30th June but most analysts believe the EU will reject this but offer a longer delay. European Council President Donald Tusk has urged the other 27 leaders to back a flexible Brexit extension of up to a year.
At the summit, which begins at 17:00 BST this evening, Mrs May will present her case for a short term delay with the option for the UK to leave at an earlier date if her Brexit deal (that has been rejected three times in the commons) can be agreed.
What could be the impact on the Pound?
It is widely expected that Mrs May will not be successful in negotiating a shorter term extension and the EU will offer a longer term, potential one year extension. However it will be the terms and conditions that the extension comes with that could have an impact on pound exchange rates.
Of course and extension will be significantly better result for the pound than a no deal. Should the UK go crashing out of the EU on Friday with a no deal then the pound, in my view, could fall by 5% or more.
Should we agree an extension but the terms are not deemed as favourable, which is highly likely as the EU will not make this easy, then I still fear the pound could fall as a result. Either way there could be some significant movement in the next 48 hours.
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