The Pound lost more than 0.3% to the US dollar and is also down against the Euro, during early Monday trading, as the markets brace for a Boris Johnson speech, during which the British Prime Minister is expected to deliver his vision and guidelines for the post-Brexit future of the country. According to reports, Johnson will highlight his government’s refusal to align with EU regulations and employment rights as part of any trade deal – both seen as red lines by the EU. This stance is likely to create friction in the negotiations for a post transition period trade deal.
Such a scenario would be likely to have a very negative impact over the British economy and is behind Sterling’s weakness. Investors are once again pricing-in heightened chances of the UK crashing out of its existing relationship with the European Union at the end of the year, without a trade deal in place.
