GBP/USD Steadies After Slight Dip on Concerns About Post-Brexit EU-Britain Relations
Arslan Butt • 1 min read
The Pound has recovered and is back to trading above 1.30 against the US dollar after sliding below this level in the previous session over fresh worries of a no-deal Brexit. At the time of writing, GBP/USD is trading at around 1.301.
Finance minister Sajid Javid’s recent interview with the Financial Times pointed to the British government taking a hard stand and insisting on a free trade agreement instead of conforming with EU rules after Brexit. With less than a year to go for post-Brexit deals to be struck, this raised fears of a hard Brexit in markets all over again.
Javid’s comments were echoed by PM Boris Johnson’s spokesperson who added that Britain is not keen to align with EU rules and would prefer a free trade agreement between both regions after its exit from the Union. This could potentially spell trouble for British businesses who would prefer easier cross-border coordination at the end of the transition period on December 31.
This week, GBP/USD can be further influenced by the release of PMI figures which would offer a clearer picture of the state of the economy. For now, expectations for a rate cut by the BOE are on the rise, with a 65% likelihood of a 0.25% rate cut in the next monetary policy meeting.