The Pound is showing weakness against the Euro and the Dollar, on a day when the British Prime Minister visits Luxembourg for talks with EU leaders. Sterling recorded 5 consecutive weeks of gains against the single currency, the best run since 2016 but, as today’s losses illustrate, Sterling isn’t out of the woods just yet: until there is clarity on the outcome of the Brexit process, downside risk persists.
Photo by Annie Spratt.
The Pound’s gains of the last 5 weeks resulted from several setbacks to Prime Minister Johnson and his plans to leave the EU on the 31st October, at any cost, which led many investors to cover short bets against the Pound, driving up the value of the currency. However, all scenarios are still possible; if the chances of a no-deal Brexit increase again we should expect renewed weakness from Sterling.
