Pound Falls, But Set for Weekly Win on Optimism Over Last-Ditch Brexit Deal By Investing.com
By Yasin Ebrahim
Investing.com – The pound fell Friday on cooling optimism over the post-Brexit deal, but remains on track for weekly win as investors bet a deal will ultimately prevail as reports that talks are set to continue into the weekend.
fell 0.54% to $1.3510.
UK Prime Minister Boris Johnson said European Union negotiators must “bring something to the table” to avoid a no-deal Brexit. The prime minister added, however, the UK was willing to “keep talking”, but conceded that differences remain. “Things are looking difficult and there is a gap that needs to be bridged,” Johnson said.
Still, the pound remains on track for a weekly win, suggesting that market participants are still betting on a last-minute deal as talks look set to continue over the weekend.
“We maintain expectation that Brexit deal is likely to be near despite UK statement that negotiations are now “in a serious situation”, which smacks of tactics as talks turn to fish,” Daiwa Capital Markets said.
EU Brexit negotiator Michel Barnier upped-the-ante earlier in the day, saying that while there was still a change of deal, the path had narrowed with just “just a few hours left” for both sides to strike a deal.
Barnier said the UK would ultimately be responsible for a no-deal scenario as the country had decided against extending the Dec. 31, Brexit transition deadline.
“If they should leave with an agreement or without, it is nevertheless the Brits that decided on that deadline,” he told the European Parliament.
Without a deal by year-end, trade between the UK and EU will default to World Trade Organization rules, which some argue could see both sides increase levies on each other’s, leading to higher prices.
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