The Great Britain pound fell against most other major currencies today, with the US dollar being an exception. Lingering Brexit concerns and political turmoil in the United Kingdom diminished the sterling’s attractiveness to traders.
UK Prime Minister Theresa May delayed the Parliament vote on her Brexit plans till January 14. May basically admitted that she would lose the vote. That did not sit well with the opposition, and Labour leader Jeremy Corbyn tabled a motion of no-confidence, less than a week after the Prime Minister faced a confidence vote in her own Conservative party.
The International Monetary Fund released a study of potential impact of the Brexit on Britain’s economy, both in “soft” and “hard” Brexit scenarios. Regardless of the scenario, the IMF warned that the impact will be very negative:
The UK’s membership in the EU means that the country enjoys a frictionless trade arrangement embodied in the EU single market and customs union. After exit, barriers to trade in goods and services would increase while labor mobility would fall.
The report also explained which sectors of the economy will be affected the most, saying that chemicals and transport equipment are most vulnerable among manufacturing sectors, while in the services sector financial services will be hit hardest by the Brexit.
GBP/USD edged up from 1.2600 to 1.2615 as of 21:22 GMT today. EUR/GBP climbed from 0.8964 to 0.8994. GBP/JPY declined from 142.83 to 142.33, retreating from the daily high of 143.23.
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