The pound fell sharply against the dollar yesterday as Prime Minister Boris Johnson once again sparked fears of a no-deal Brexit. The government has set out tough negotiating terms with the EU, which markets have interpreted as an increased risk of leaving the bloc at the end of this year with no trade arrangements in place. The pound fell 1.5% against the dollar.
Analysts believe the pound will continue to be vulnerable until there is genuine clarity on the arrangements between the UK and the EU. Previously the EU negotiators have said the UK’s access to single market will be determined by their willingness to align with EU regulation. However, ministers in the UK have responded by saying they have no intention of aligning with these rules.
GBPUSD opened at 1.3145 and fell steadily across the day, closing at a low of 1.3004
GBPEUR opened at 1.1871 and performed similarly, closing at a low of 1.1758
Safe-haven currencies fell on Monday as risk sentiment improved. The Chinese government have taken measure and pledged to contain the coronavirus which has provided some relief to worried investors. The US dollar gained 0.3% against the Chinese yuan, Japanese yen and the Swiss franc. The Chinese markets suffered in the first session of trading since the Lunar New Year hiatus.
Global growth appears to be stabilising, so investors predict a better year for US manufacturers and improved domestic demand. The euro fell 0.3% against the dollar.
EURUSD opened at 1.1076 and fell slightly across the day, hitting a low of 1.1048 and closed at 1.1063
