The pound had to navigate some tricky waters on Thursday following comments from the European chief negotiator. Michel Barnier’s comments saw the Pound tank against a host of currencies. Although the losses corrected fairly promptly, Sterling exchange rates found themselves at a month low.
What caused Sterling exchange rates to dip?
The pounds sell off and depreciation was triggered by comments from Michel Barnier who portrayed the troubled that negotiations with the UK
We’ve reached a state of deadlock, which is very disturbing. We are not asking the UK to make concessions.
Michel Barnier went further, saying that the UK’s relationship with the EU couldn’t be defined without progression.
Market interprets no deal
Following Barnier’s comments, Sterling exchange rates plummeted with the Pound losing against a host of currencies. The heaviest depreciation was seen against the JPY and USD. Many trade experts believe the losses were heavy due to the recent conversation about pre-emptive measures taken in case of a NO Deal Brexit outcome. In recent weeks there has been a lot of speculation about the UK Governments plan for a no deal with Theresa May setting out a plan in order for the movement to continue. These include lorry checks to be held in-land in order to not create queues at Dover and other ports.
Davis still remaining upbeat on Brexit talks
Although Barnier had spoken in a negative fashion about the negotiations so far, David Davis the UK’s Brexit Secretary appeared more upbeat about their progress stating that he wanted to
Build on the spirit of co-operation we now have.
With the Brexit secretary highlighting the progress made on UK and EU Citizens rights, with Davis saying that he believed the talks had moved the two sides closer to a deal. He also confirmed that Theresa May would honour the UK’s financial obligation to the EU.
Sterling exchange rates tumbled following Barnier’s ‘Deadlock’ comments
The pound’s recent gains were brought briefly to a halt following the EU chief negotiator’s comments with Sterling exchange rates losing pace against a host of Currencies.
GBP/JPY was experienced heavy losses with the rate dropping from 148.75 to 147.54. The pair briefly losing around 0.7% in a few hours.
The GBP/USD was briefly rattled by the comments, which saw the pair drop from 1.3237 to 1.3139. GBP/USD dropping roughly 0.5% in a few hours following the comments relating to a possible deadlock in Brexit negotiations.