Pound sterling enjoyed something of a filip when it looked like solid progress had been made in the negotiations between the UK and the EU on the terms of Brexit. But with the news that the next stage will be much tougher with Brexit trade talks pushed back until March has seen it slump again. So what’s going on precisely?
Philip McHugh of Currencies Direct says of the circumstances: “The pound ended last week on poor form, shedding the gains made during the preceding days. The European Council agreed that the UK had made sufficient progress in the first phase of Brexit negotiations to move on to the second, yet markets were not happy.
Numerous officials warned that the next stage could be even more difficult than the first, reminding markets that it had taken nine months for the UK to resolve what was supposed to have been swiftly concluded.
Additionally, European Commission President Jean-Claude Juncker claimed that negotiations on trade wouldn’t start until March in all likelihood, meaning the recent scrambling by the UK to finalise phase one talks in December had done little to speed up discussions.”
It’s been a rocky ride for sterling since Brexit and there was some glimmer of hope that stability and strength has returned to some extent but it would seem that turbulent times are going to continue.