As markets await a speech from Dominic Raab, the UK's “Brexit” Minister, FX traders have pushed the Pound Sterling close to a 1-year trough versus the Euro. The Pound was initially pushed to that low after the UK Prime Minister essentially dismissed the negative consequences of a Brexit without an agreement with the European Union. Analysts say those comments were intended to undermine the Finance Minister's decidedly more dire warnings.
As reported at 11:19 am (BST) in Tokyo, the EUR/GBP was trading at 0.9087 Pence, down 0.08%, with pair ranging broadly from 0.90480 Pence to a peak of 0.90915 Pence. The GBP/USD was trading higher at $1.2898 up 0.24% and just off the session peak of $1.2902.
Traders View Dismal Outcome
Markets are leaning toward the belief that no amount of negotiations will eke out a favorable trade deal,for the UK. Analysts say that a hard Brexit it likely to push the GBP/USD to $1.20, a figure in accord with the latest polls, with a similar outcome likely for the EUR/GBP, perhaps at the 0.91 Pence level.