The Pound’s recent volatility provides a good illustration of the current situation, in which the possibilities of there being no trade deal at the end of the Brexit transition period and the Bank of England introducing negative interest rates early in the new year dominate the sentiment of traders. Both scenarios would be negative for the currency while any hints pointing in the opposite direction will support it.
Investors are staying tuned-in and reacting to any meaningful development and that’s why sterling rose versus both the Dollar and the Euro on Monday and early on Tuesday following declarations from a senior EU official underlining the block’s commitment to a negotiated outcome, despite the UK’s Internal Market Bill remaining an obstacle.
