The Sterling pound today plunged against the dollar after both EU and UK leaders said that the possibility of a no-deal Brexit was quite high at the moment. The GBP/USD currency pair fell on the reports given that many investors were hoping that the EU and UK would agree to a compromise deal.
The GBP/USD currency pair today fell from a high of 1.3324 in the late Asian market to a low of 1.3184 in the early London session and was trading near these lows at the time of writing.
The currency pair fell today after British Prime Minister Boris Johnson told reporters that the possibility of a no-deal Brexit was very likely. Investors were disappointed by the news given that PM Johnson had met his EU peer Ursula von der Leyen on Wednesday in efforts to reach an agreement. The European Commission and the UK were unable to agree on fishing rights as the UK wants to control its waters. On the other hand, the UK does not want to be tied down to EU regulations, which it likens to losing its sovereignty.
Comments by Andrew Bailey, the Bank of England Governor that the bank has limited abilities to calm markets after the transition period did not boost the pair. Bailey’s comments that the BoE is working with banks on negative rates could have driven the cable lower.
The currency pair’s future performance is likely to be affected by Brexit news and US dollar dynamics.
The GBP/USD currency pair was trading at 1.3178 as at 11:15 GMT having fallen from a high of 1.3324. The GBP/JPY currency pair was trading at 137.19 having dropped from a high of 138.62.
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