Sterling has barely reacted to news that the House of Commons voted to delay Brexit beyond 12 April
There are a couple of things to consider as to why the pound isn't moving more on the headlines earlier here. The most obvious being the timing of the vote which came in late at night in the UK and it was basically around twilight zone between the end of US and the start of Asian trading; liquidity is known to be thin around these times.
The second is that such a decision still requires approval by the House of Lords and ultimately by European leaders on 10 April. I don't believe the former is much of an impediment but without a clear solution to break the deadlock, the EU may spoil the party but it would be akin to shooting themselves in the foot as well.
The final reason to consider is that considering the volatility over the past few months, traders have gotten less interested in trading the pound - or at least trying to guess where it is going. CFTC/CME data shows that open interest in pound options and futures fell to their lowest level since 2015 recently:
Perhaps traders are erring more towards spot transactions given the nature of the way the pound is behaving recently. But I reckon plenty of currency traders are also more sidelined than ever before when trading the currency given the unpredictable nature of Brexit.
Whatever the case is, I reckon the timing factor (first reason) may be something to consider ahead of the London open later. With the near-term bias in cable also being more bullish, we could see the pair test the 1.3200 handle after the open in the session ahead.
