Sterling falls as investors re-evaluate no-deal risk
Sterling fell to six week lows against the Euro and fell against the dollar as little progress in Brexit talks have led investors to re-evaluate the risk of a no-deal. Michael Barnier speaking on Monday said that he was ‘rather downbeat’ about chances of a deal, the pound is very sensitive to Brexit headlines at the moment and fell as a result.
Talks are coming to the end stage with Boris Johnson set to meet European Commission President Ursula Von Der Layen in an 11th-hour attempt to break the impasse in the Brexit negotiations. This keeps hopes of an agreement alive with the aim to conclude a deal by Wednesday, Thursday at the very latest.
Boris Johnson did outline his concerns to Von Der Layen over a telephone call on the key issues which are proving to be a stumbling block to an agreement being reached. Furthermore Downing Street has said it will hold a vote on new legislation overriding the withdrawal agreement on Wednesday – a potentially deal-breaking move. The next few days are very crucial and Sterling is likely to remain highly volatile.
The Dollar fell against a basket of currencies on Monday, as investors looked past the rise in Cornavirus cases and ahead to the possible new US stimulus deal and vaccines to fight the pandemic. White House economic adviser Larry Kudlow on Monday said talks on another round of stimulus funding to deal with the deadly coronavirus pandemic are moving in the right direction, and President Donald Trump’s administration and Congress are getting closer to agreement.
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