The Great Britain pound dropped today, falling against all other most-traded currencies. It dropped even versus the Japanese yen, which previously was the weakest currency during Wednesday’s trading. The reason for that was comments from the European Union chief Brexit negotiator.
The sterling was getting support yesterday from hopes that a trade deal between the United Kingdom and the European Union can be reached before the year’s end. Optimism soared amid reports that negotiations have “entered a tunnel”, meaning that all talks will be behind closed doors, with no media coverage or anything else that could disrupt the process. Markets were hopeful that it means that the negotiations have reached the final stage. But EU Brexit negotiator Michel Barnier poured cold water on such hopes, stating that “differences still persist” and that:
A deal still hangs in the balance.
Some analysts pointed out that Barnier was speaking before EU ambassadors, and his words were an attempt to calm down those European politicians, who think that he is too generous with Great Britain. There are three unresolved issues between the UK and the EU: fisheries, state support of companies, and future dispute resolution.
On a more positive note, the Medicines and Healthcare Products Regulatory Agency, Britain’s medical regulator, approved Pfizer/BioNTech coronavirus vaccine for use. The first 800,000 doses will be available in the UK as soon as the next week.
GBP/USD dropped from 1.3420 to 1.3346 as of 11:58 GMT today. EUR/GBP rallied from 0.8892 to 0.9030. GBP/JPY slipped from 139.98 to 139.77.
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