Even though UK GDP in February 2019 was released according to expectations, sterling traders are still waiting for EU confirmation of Brexit delays. The pound only rose slightly by 0.2 percent to around 1.3078 against the US dollar, although the UK Gross Domestic Product (GDP) data for February was reported to be in line with expectations in the middle of the European session this Wednesday (10 / April). 

The EUR / GBP currency pair is also relatively stable at around 0.8623. The attention of Sterling traders is now focused on how long the Brexit delay will be given by EU leaders to Britain. The UK Office for National Statistics (ONS) reported that UK economic growth in February was estimated at 0.2 percent (Month-over-Month), or up from 1.5 percent to 2.0 percent (Year-on-Year). 

Request To Delay the Brexit Deadline

Even though it was slightly lower than 0.5 percent growth during January, it was considered solid and supported the record growth in UK which remained strong. An economist at Capital Economics, Ruth Gregory, said that the preliminary estimate of GDP is stronger than the survey, providing a convincing signal that at least until February, the economy (UK) has managed to overcome Brexit chaos and slowdown internationally.

Apart from that, investors and traders were not too enthusiastic in responding because they were still waiting for announcements regarding Brexit delays. The European Council will discuss the issue in its meeting starting today, which is likely to end tomorrow morning. Although PM Theresa May has filed a request to postpone Brexit deadlines until June 30, EU officials are rumored to only grant a longer delay. 

Some estimates currently circulating range from a delay of nine months to December 31, or up to a full year. GBP remains in the middle of its range of moves in the last few days ahead of the European Council meeting tonight, and expectations are centered on long-term extensions (9-12 months), said Adam Cole at RBC Capital Markets.

Issues of Postponing Brexit and Early Elections

The GBP / USD currency pair rose two straight days. However, the pound is still overshadowed by a number of political risks related to Brexit.  The pound strengthened around 0.15 percent to 1.3080 against the US dollar at the start of the European session, but it has not yet come out of this month's lowest range. 

Is Early Election Inevitable?

As is known, last month the European Union gave time for the United Kingdom until April 12 to determine whether they would choose "Brexit No-Deal" or delay Brexit until an undetermined time. The Brexit delay expected by the European Union in the ultimatum requires the UK to participate in the European Union parliamentary elections on 23-26 May.

In line with that, the British parliament has decided to remove the probability of "Brexit No-Deal", with the release of legislation requiring PM Theresa May to submit a Brexit deadline delay. Responding to the approaching April 12 deadline, last weekend May sent a letter of request to the European Union to postpone it until June 30. 

On the other hand, he also held cross-party negotiations to seek support for the draft EU Withdrawal Agreement from groups outside his own Conservative party, which were considered "full of rebels". May's decision triggered the potential for a new political crisis, because shrinking support for his position as Prime Minister could lead to holding early elections in the UK. 

The European Union Has Not Naturally Gained

Analysts from one of the world's largest forex dealers, Citigroup, also said that they expect the UK to hold early elections in the next few months, while the European Union will offer another Brexit deadline delay. However, it is not yet known how long the delay will be approved by the European Union.