The British pound opened the week on a negative note today, as thin trading volumes pushed the currency lower against its major peers. Increasing uncertainty toward Brexit caused the British pound to decline for the past two weeks against the US dollar.
Currency traders avoided the British currency ahead of Christmas, after new comments from a number of officials revealed growing tensions in the legal fight of Brexit. Scotland First Minister Nicola Sturgeon said that Scotland will intervene against the appeal of the UK government, which aims to trigger Article 50 without a parliamentary approval.
Sturgeon said that the Scottish government realizes that Brexit will harm the economy of the region, and will take away certain rights and freedoms Scottish people and Scottish businesses currently have. The Scottish government will be using the legal services of Lord Advocate James Wolffe to intervene in the Brexit case, which is due to be heard in the current month. Scotlandâs vote was largely to remain in the European Union in the Brexit referendum on June 23.
Today, Sturgeon increased the pressure by stating that Scotland will hold a new independence vote to separate from the United Kingdom if the UK government moved ahead with its plans to depart from the European Union.
Meanwhile, UK Trade Minister Liam Fox said that the nation needs a transitional deal with the European Union to allow British firms a smooth transition. The minister suggested that the UK could reach an agreement to hold a position similar to Turkeyâs; to be allowed to remain within the customs union after leaving the European Union.
However, reports quickly emerged that Liamâs suggestion is illegal and would not be authorized by the World Trade Organization. British negotiators are facing a solid position from EU negotiators over the terms of Brexit. The union, led by Brussels, is insisting that no such transitional deal will be made.
GBP/USD traded at 1.2421 as of 16:45 GMT on Monday, after touching 1.2364 at 15:40 GMT, the pairâs lowest level for the day. GBP/USD opened trading at 1.2476. EUR/GBP traded at 0.8411, after surging to 0.8447 at 15:20 GMT. EUR/GBP started the week at 0.8367.
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