Although Britain's exit process is nearing the end, the pound is likely to fluctuate sharply regardless of whether a deal is soon reached between the pound and the European Union, leaving investors hesitant to bet on the pound's next big market.
The pound rose to a one-month high against the dollar last week as hopes of a breakthrough eased fears of Britain's "no deal" exit in March.
But as Britain's land border with Ireland stalled after leaving Europe, the pound fell back to a week low on Monday after dampening optimism ahead of Wednesday's EU summit.
Even if British Prime Minister Theresa May and the EU agree, there could be a fight within her party over the issue - the biggest unsolved hurdle - that would leave investors generally cautious about setting up large spot Sterling positions.
"I will not rush to buy pounds. We could easily see the pound fall to $1.15 or rise to $1.45, "said Derek Halpenny, European director of global market research at Mitsubishi UFG.
There are two hypothetical scenarios that result in European retreat.
The pound traded against the euro EURGBP=D3 in the past year, mainly in the 0.86-0.90 pound area. The pound fluctuated more sharply against the US dollar, but probably because the dollar itself fluctuated in 2018.
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Through three months and six months' option, the "no agreement" Euro hedging trade is very popular.
There is no indication that this is changing.
Many legislators hoping for a more radical exit from Europe, as well as the Northern Ireland Democratic Union (DUP), have threatened to vote against next year's budget, threatening to bring down the Treasury government. The Conservatives failed to win a parliamentary majority in last year's election, and Teresa Mae relied on DUP support to complete her cabinet.

<>The end of Euro withdrawal is still unknown.

 

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