Asian markets sink but pound edges up ahead of new Brexit vote

Asian markets retreated Wednesday after two days of gains but the pound enjoyed a slight uptick after the previous day's sharp losses as British officials looked to ease concerns about the possible impact of a no-deal Brexit.

The sterling saw wild fluctuations Tuesday as it hit a near two-year high on news Prime Minister Theresa May had won a last-minute revision to her agreement with the European Union.

But it then tanked to a three-week low as it was tossed out by MPs at Westminster later in the day.

The decision means lawmakers will vote Wednesday on whether to leave the EU on March 29 without an economic agreement -- which is expected to fail -- then Thursday on whether to extend the deadline.

In a bid to ease concerns about the financial impact on the economy if MPs vote later in the day to leave with no agreement, officials in London said they will slash tariffs on 87 per cent of imports, and will not apply customs checks on the border with Ireland.

However, there remains a lot of uncertainty, with some observers suggesting the latest developments put the country a step closer to another referendum, while others say it could make a divorce without an agreement more likely.

"My tuppence is that parliament has, in their own mind, seized control of the Brexit process and will duly ask and likely get an extension to the 29 March exit date," said OANDA senior market analyst Jeffrey Halley.

"The breathing space granted will be used by whomever to renegotiate a more palatable Brexit deal for the UK. Except nobody has asked the Europeans yet.

A short-term gain may yet belie long-term pain."
"The outcome of the trade talks -- and perhaps the US-eurozone will likely follow -- will dictate whether we will gently roll down the slope or off the edge of the cliff."