Sterling stumbles on signs of collapse in Brexit talks

  • by Ofeed Team
  • October 8, 2019, 12:25 AM
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The pound fell against the euro and other major currencies on Tuesday, following press reports that talks on Brexit are close to collapse after remarks from German Chancellor Angela Merkel.

As of 10:50 GMT, the pound plummeted to a one-month low of 0.8999 versus the euro and a one-week bottom of 1.2208 against the U.S. dollar.  

The developments were made more difficult after a sky news interview that German Chancellor Angela Merkel had told British Prime Minister Boris Johnson that a Brexit deal was "highly unlikely."

Merkel told Johnson that there would be no Brexit deal unless Northern Ireland was in the customs union "forever."

Some press reports said that the UK government is preparing for the Brexit negotiations this week, which increases the likelihood of further declines in sterling, has risen, and we expect the exchange rate to fall to the euro.

This week’s meeting could be the final attempt for parties to reach an agreement on the Brexit deal, ahead of the departure date of 31 October.

Meanwhile, there are several warnings that a chaotic exit from EU could cost the U.K. up to $100 billion of public money.

The sterling also suffered a strong blow after the British Retail Consortium report, which showed a decline in retail sales for September, down from 0.7%, recorded last year.

On Thursday, the U.K. will release a parade of important economic reports, including manufacturing production, monthly GDP and goods trade balance for August.

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