British Pound Tumbles on Renewed Brexit Concerns

The pound opened trading this week with a negative decline today following new reports that pointed at increasing legal difficulties for the United Kingdom to maintain its access to the single market area in Europe within a Brexit scenario.

Currency traders lowered their demand for the currency to an extremely weak level today, which forced the British currency to perform poorly. Traders’ caution was stoked by a renewed worry that the UK government will fail to secure its access to the European single market while at the same time limiting immigration into the UK.

Access to the European single market is linked to freedom of movement within its member countries, and one of these states cannot be selected without the other, according to Malta Prime Minister Joseph Muscat. Muscat, whose country currently hold the presidency of the European Union, said in an interview with BBC that the union is yet to reach an agreement with the UK on a number of details.

These details include the UK’s departure bill and the future of the borders between the UK and the Republic of Ireland. The Prime Minister added in his interview that limiting the freedom of movement of EU citizens while maintaining access to the single market “is just not happening”.

The British pound further declined today as traders reduced their demand for the currency ahead of a number of data releases that are due this week. That includes UK mortgage approvals data on Tuesday, November’s manufacturing PMI data on Thursday, and November’s construction PMI on Friday.

GBP/USD traded at 1.2408 as of 17:04 GMT today as the pair declined from 1.2527, which it touched at 02:50 GMT. GBP/USD lowest level today was at 1.2387 at 15:45 GMT, while trading on the pair started today at 1.2474.

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