As mentioned in my article on the future of UK/EU trade talks in April, the week commencing the 11th of May would see the completion of the second of three web-linked negotiating rounds, with the outcomes of the meeting being shared later today.
Unfortunately, for sterling, the news is not expected to be positive. The admission from the Government that checks will be made on goods crossing the Irish sea, in direct conflict with what businesses in Northern Ireland were promised during the 2019 election – and indeed the entire Brexit process – means that unless the outcome of this week’s meeting was somehow a spectacular success, the pound could be in for a rough ride today. Preempting the news, sterling has already started to collapse to the bottom of its recent post-coronavirus dip ranges, with a push lower on the cards presumed if today’s news is hinting more towards a hardening of the UK’s position on the approach to the final meeting week commencing June the 1st, and the more ominous final deadline for an extension on the 30th.
The brutal reality of the situation for the pound is that Brexit no-deal fears are now being priced in alongside concerns over the Government’s weak lockdown exit plans – a compounding of the two is a death sentence for sterling; especially when both the UK and EU Governments are concentrating their efforts on tackling Coronavirus as a priority.
To read more on Covid’s impact on Brexit, you can find my article published here.
Have a great weekend,
Author: Joshua Haden-Jones, Senior Relationship Manager
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