The Pound Sterling once again is under pressure as FX traders await the official release of the first draft of the document governing the Brexit transition. Earlier today, Michel Barnier, the EU negotiator, said that Theresa May’s government was holding tight to an “illusion” even as the clock winds down toward Britain’s withdrawal sometime next year. One FX strategist in London says that traders are worried about the “sticking points” and don’t understand why these have not yet been hammered out.
As reported at 11:21 am (GMT) in London, the GBP/USD was trading at $1.39, down 0.17%; the pair has ranged from a session trough of $1.3869 and a peak of $1.3908. The EUR/GBP is trading at 0.8798 Pence, up 0.04%; the pair earlier hit a session high of 0.88111 Pence while the low is at 0.87793 Pence.
Brexit Discussions have Traders Worried
The Pound has appreciated about 3% versus the US Dollar since the beginning of the year, largely due to the Dollar’s struggles. At the same time, against the Euro, the Pound has only gained about 1% and has continued to trade within a tight range. Long Sterling positions have been reduced as traders worry about the constant barrage of commentary on the Brexit talks. Analysts say that both sides, the EU and the UK government, have been continually throwing out accusations against each other which has created an atmosphere of concern for FX traders.