Pound sterling falls big, as Brexit enters its End Game moment.

This year’s 3 biggest news stories in the markets have no doubt been Covid-19, Brexit and the US Election.

As 2020 draws to a close, much to the relief of us all, 2 out of 3 of this year’s big headlines will have drawn to a conclusion, Donald Trump though still insisting the elections results were ridged, is at least slowly accepting that his presidency will end next month with Joe Biden taken seat in the White House. Final Brexit terms are still being fought out by the UK and EU, but with 31st December deadline fast approaching End Game (we’ll let you decide who are the Avengers and who is Thanos and he’s warriors between the EU & UK negotiators) this will be one story we can move on from in 2021, or at least move on to a new chapter.

After 4 years of debating and negotiating Brexit, we are certainly watching the last scenes, and if last weeks episodes were to go by anything, where we saw days when the market was in buoyant and confident mood that a deal would be agreed in the coming days, seeing pound sterling make big gains in the market particularly against the US dollar and euro. The following day comments from EU chief Michel Barnier and French president Emmanuel Macron, who both doubted any deal was imminent, this then caused concerns and the pound sterling experienced big losses against a basked of currencies. By the third day optimism was back up with negotiations expected to continue with hope that a deal would be agreed this week, as a result the pound managed to recover its previous day’s losses and end the week in a strong position.

Over the weekend Boris Johnson held an hour-long phone call with European Commission Ursula Von Der Leyen from his offices at Chequers in attempts to thrash out a deal. The three main sticking points being fisheries, level playing field and governance. The call was said to be neither positive nor negative with both agreeing to continue further talks this week.

Pound sterling started the day and week falling heavily right across the market, seeing losses of over 1% value against currencies like the Euro, US Dollar, Swiss Franc and Japanese Yen before mid-day. Newspaper reports on Monday morning claimed that British Prime minister Boris Johnson was ready to walk away from talks within HOURS, if a breakthrough wasn’t insight. The Sun reported that Johnson was ready to walk away from negotiations “Within hours” as demands being made by the EU were “outrageous”. It really is end game stuff now. If by close of play Monday there is no movement, the question will be, is it worth carrying on?

Michel Barnier added to concerns as he warned he “cannot guarantee” there will be a Brexit trade deal agreed, with Brussels eying Wednesday as its deadline to seal an agreement. Barnier also revealed after 10 hours of talks on Sunday with UK counterpart David Frost this again had failed to yield any breakthrough.

The sudden high volume of concerns that a deal was once again becoming unlikely has caused volatility in the currency market with the pound sterling being the biggest casualty amongst currencies. One thing for sure is that we approaching the end, what is less certain is what ending we’ll see, some viewing it as 50/50 chance of a deal or no deal. All could become a lot clearer by tomorrow, or chances are that the back and fourths will continue into the week (again), what we do know is we are no longer talking months, its likely to be weeks if not days before the UK and EU's fate is sealed going into 2021.

We are expecting continued volatility this week as we approach make or break territory for Brexit. If you have a currency transfer to make now or in the future and want to minimise your risk and exposure to losses, please get in touch with us today, and one of our expert traders will be happy to keep you up to date with the latest news and rates, to help you exchange your currency at the best rate possible.

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