The Pound sterling fell on Wednesday after the European Commission President, Jean-Claude Juncker remarks about the risks of no-deal Brexit on October 31.
Junker describes a no-deal Brexit has become ‘palpable,’ pushing the pound lower to a low of $1.2438, compared to the session’s open at $1.2497.
He asked British Prime Minister Boris Johnson to provide proposals for an alternative in written form as soon as possible, as he did not see any concrete solutions that would solve the problem of Brexit in his speech at the Meeting of the European Parliament in France.
Junker also added that the talks with Johnson in Luxembourg were "cordial, constructive and positive in part," but warned that the prospect of the UK leaving the bloc without an agreement to ease the economic blow "remains real."
Johnson, on the other hand, still insists that he would leave the European Union by the end of next month whether he gets a new deal with the EU bloc or not.
With six weeks remaining and no formal proposals being made by the British government according to EU officials, the pound may come once again under pressure.
Although there are no written suggestions for alternatives to back-up support, both sides have talked about the possibilities. The UK has proposed the creation of an agricultural food zone throughout Ireland, eliminating the need for screening. However, the EU says this is not enough to replace support and insists that the government must come up with more ideas.
A report from the U.K. released today added further downside pressure on the pound after it showed CPI inflation fell to 1.7 percent in the year ended August, the lowest since December 2016, from 2.1 percent in July.
Later in the day, the key focus will turn to the Federal Reserve’s rate
decision, amid expectations of another rate slash by 25 basis points to 2.00