Blog

Market Update

• Posted by currencies in Brexit, coronavirus, Sterling, UK, Uncategorised
• June 24, 2020
• No Comments

The pound fell against the dollar and euro, weighed down by uncertainty over Brexit negotiations even after global risk appetite got a boost from positive economic data as countries ease their lockdowns.

For the past two days, the pound had risen against a weaker dollar, hitting a six-day high of $1.2541 at 0007 GMT on Wednesday, before reversing course as the greenback recovered.

British Prime Minister Boris Johnson unveiled a significant easing of the coronavirus lockdown in England, saying pubs, restaurants and bars can reopen from July 4.

But top medics signed an open letter in the well-regarded British Medical Journal, warning politicians that local flare-ups of COVID-19 are likely, and a second wave is a real risk.

Uncertainty about ongoing Brexit negotiations also still posed a downside risk for the pound, analysts said.

 Lifting the UK lockdown does not alter the key GBP driving factor – the uncertainty about the UK-EU trade deal.

Four years after Britain voted to leave the European Union, the pound is still well below its pre-referendum levels and there has been little progress in agreeing the country’s future trading relationship with the bloc.

Britain and the EU are set to miss their agreed end-of-June deadline for assessing whether the United Kingdom’s financial services regulation is deemed “equivalent” to regulatory standards in the EU.

This leaves just six months before a potentially messy UK exit.