Good morning,

The British pound was sold off yesterday, as fears surrounding the Brexit negotiations continued to ramp up. Falling over 1% against the euro and over 1.3% against the dollar, steady gains from the end of last week and the start of this week have been eroded away in the past 24 hours. Although it feels like we have been here on many occasions before, there is starting to be a prevailing sense from media reporting that it’s unlikely there will be any second chances for renegotiation this time around. As we have highlighted on many previous occasions, Boris Johnson put a marker down for 15th October for the deadline to know if a deal will be agreed upon. If there is not enough to formalise the negotiations into law, the two sides should shake hands and walk away. That deadline is tomorrow.

A report from Bloomberg released late yesterday states that the EU’s side does not see enough progress made for an agreement to be set in stone. The EU’s chief negotiator, Michel Barnier, said that there has not been enough progress to enter into the “tunnel” phase, where the legal text will be drawn up and signed by both sides. The Bloomberg article goes on to state that an unnamed British official blames the EU for purposely running down the clock, leaving the UK with no options.

With GBPEUR now below 1.10 and GBPUSD below 1.29, prices will be sure to be guided by any further headlines which will release over the course of the day.

Have a great day. 

Author: Jack Nicholls, Relationship Manager


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