Sterling holds ground as UK braces for blind Brexit

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Daniel Webber
Daniel Webber
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Daniel is Founder and CEO and has 20 years of experience in the international finance world focusing on cross-border payments, technology and the property sectors. Daniel is widely quoted as an expert… Read more
  • Analysts say Brexit “impasse” is just a political charade
  • The November summit has been scrapped
  • GBP to euro exchange rate at 1.1386

 

The British pound is holding its ground against the euro despite talks of a blind Brexit. The current GBP-EUR exchange rate is at 1.1386, even if European Union leaders concluded that recent negotiations do not merit a November summit. The fact that no final deal has been reached is troubling according to reports, but analysts in Britain say that it is merely a political charade.

Key figures from both parties assure that a deal is still possible considering the commitment of both sides to finally reach an agreement. Theresa May told reporters that a deal is “achievable” after attending another meeting with EU leaders, but various currency at Sterling Live do not believe that a deal will be signed within the year.  

While many are optimistic, it is noted that a blind Brexit, a situation that many MPs detest, may actually happen. According to experts, the union will not likely back down on its plans for Northern Ireland, a deal that Mrs May will never take based on her pronouncements in the past few days.

The infighting within the British government will be unavoidable experts say, especially now that speculations about Mrs May looking into an extension of the country’s transition period has hit several newspapers.

"The real driver in the markets this morning is the news that Prime Minister May could be looking at extending the Brexit transition period by a further 12 months. To many this seems like a sensible option, why rush the negotiations whilst so many details remain? However, to many Tory Brexit MPs this may not suffice", says Hamish Muress, one of OFX’s currency analysts.

Mrs May did not make such an announcement though, but analysts fear that she might be considering it. The move will translate to paying large sums of money to the European Union for another 12 months, experts say.

"Given that there seems to be time to negotiate until December it was just too early to expect a breakthrough in talks this week", says Richard Falkenhäll, the Senior Currency Strategist with SEB.


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