GBP/USD Weakens as Hard Brexit Concerns Rise Again

GBP/USD Weakens as Hard Brexit Concerns Rise Again

Posted Thursday, May 28, 2020 by
Arslan Butt • 1 min read

The Pound continues to trade weak against the US dollar after falling sharply during the previous session on the back of yet another roadblock in Brexit trade negotiations between Britain and the EU. At the time of writing, GBP/USD is trading around 1.225.

On Wednesday, UK’s chief Brexit negotiator David Frost stated that there was a big gap between the two regions’ expectations with regards to trade discussions. While addressing the House of Commons, Frost listed the EU’s demands for accessing fishing waters in the UK was emerging as a sore point and added that the EU’s stand was “not a mandate that is likely to produce an agreement that can be agreed with us”.

Frost also maintained that Britain remained steadfast about ending discussions with the EU by the transition deadline in December. He added, “I think it’s fair to say that we have a fundamental disagreement at the moment on most aspects of the level playing field. There are one or two areas that are slightly less controversial and problematic but in most of the important areas, there’s a big gap.”

His comments served to heighten the uncertainty about whether Britain and the EU would be able to successfully work out a trade agreement before the end of the Brexit transition period on December 31 this year. This has once again raised the likelihood of a hard Brexit and sent GBP/USD lower as a result.

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