Sterling Drops Ahead of Sunday
The pound took further losses against the US Dollar and the Euro yesterday, as currency markets became more cautious around the possibility of a no-deal Brexit.
Sterling has been volatile on Brexit headlines, dropping in response to news suggesting a deal is unlikely and rising when hopes are raised. Britain has once again told the EU that it should make significant concessions to break the deadlock by the end of the weekend, with members of the European Union side also requesting the same thing from the UK. Everybody is now focused on Sunday as a proposed deadline by which progress must be made.
Speaking for the first time since his meeting in Brussels with Ursula Von Der Leyen, the Prime Minister said now is the time for firms and people to prepare for a no deal outcome.
Talks continue between the two sides, but Boris Johnson said they were not yet there at all in securing a deal.
The euro strengthened yesterday after the European Central Bank went against market expectations of a larger stimulus boost, while sterling fell as the prospect of a no-deal Brexit appeared more likely.
The ECB expanded its debt purchase scheme and agreed to provide banks with even more ultra-cheap liquidity as long as they keep passing the cash onto companies. The ECB also said it is monitoring the euro’s exchange rate in regards to possible implications for the medium-term inflation outlook, after the Euro hit a two-and-a-half year high against the Dollar.
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