The pound fell on Friday as EU Commission President Jean-Claude Juncker reaffirmed the fact that the withdrawal agreement secured by Theresa May was the only option to proceed with Brexit. Sterling fell 0.4% against the dollar and 0.2% against the euro. Boris Johnson had said last week that he was intending on renegotiating the exit deal in order to remove the controversial Irish backstop. This impasse has increased fears that the UK is headed for a no-deal exit, putting pressure on the pound.
The Bank of England will give its monetary policy position on Thursday, but few analysts are predicting that there will be a change from the present 0.75%. Some banks believe the pound is likely to stay at around $1.24 mark against the dollar until September.
GBPUSD opened at 1.2431 and was steady for the morning before falling sharply in the afternoon to close at a low of 1.2384
GBPEUR followed a similar pattern, opening at 1.1163 but fell less sharply to close at a low of 1.1135
The Trump administration ruled out any intervention to lower the value of the dollar in a statement on Friday. President Donald Trump had previously accused other nations of doing this in order to gain a trade advantage. He has complained that the US Federal Reserve is keeping interest rates too high which is the cause for the dollar’s strength. The Fed will make its decision on a rate-cut on Wednesday evening. The ICE US dollar index has gained 3.5% in the last 12 months, mostly against the euro.
The Euro was down 0.17% against the dollar on Friday, though this was a recovery from a two-month low after the European Central Bank’s indicated it would cut rates at its next meeting. The single currency was down 0.8% for the week.
EURUSD opened at 1.1136 and was stable for most of the day until the early afternoon where it fell to a low of 1.1117 and closed at 1.1123