Sterling Pound Falls as EU Says the Chances of a Brexit Deal Are Slim

The Sterling pound today attempted to rally against the US dollar, but its gains were limited by Brexit headlines indicating that the chances of a Brexit deal by October 31 were minimal. The GBP/USD currency pair today spiked higher before quickly reversing and heading lower as investor sentiment shifted driven by the negative Brexit headlines.
The GBP/USD currency pair today spiked to a high of 1.2291 before retracing all its gains and falling to a low of 1.2198; the pair has since retraced some of its losses.
The currency pair opened today’s session trading with a bearish bias during the Asian session as investors digested the negative outcome of yesterday’s phone conversation between Angela Merkel and Boris Johnson. The pair spiked to its daily highs after The Times reported that the European Union was ready to offer a concession regarding the Irish backstop. However, the proposal was quickly rejected by the Northern Irish DUP and eurosceptics from the Conservative Party as it would retain the backstop. The pair dropped soon afterwards even as PM Johnson confirmed that he still wanted to get the UK out of the EU by October 31 despite the Benn Bill prohibiting a unilateral hard Brexit.
The currency pair had a muted reaction to the release of the FOMC minutes, which reiterated Jerome Powell‘s position that the US economy was stable, but was facing external risks and that a recession was still far off.
The currency pair’s future performance is likely to be affected by Brexit news and tomorrow’s multiple UK releases.
The GBP/USD currency pair was trading at 1.2214 as at 18:38 GMT having fallen from a high of 1.2291. The GBP/JPY currency pair was trading at 131.31, having risen from a low of 130.66.

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