Traders Dump GBP On Boris's Brexit Threat

By Staff of Admiral Markets

Access To Financial Markets Made Easy • Sep 8, 2020 at 5:12 AM EDT

UK Prime Minister Boris Johnson shocked many economists and analysts by expressing the need for an agreement with the European Union regarding a trade deal to be completed by the time of the European Council Meeting on October 15.

Traders dump GBP on Boris's Brexit threat

UK Prime Minister Boris Johnson shocked many economists and analysts by expressing the need for an agreement with the European Union regarding a trade deal to be completed by the time of the European Council Meeting on 15 October. He also expressed his willingness to walk away without a deal at the end of the year.

Traders subsequently dumped the British pound on the news. (FXB)

Over the past few months, UK and EU negotiators have made very little progress in talks. The main issues include:

State aid
Fishing rules
What has worried some in the EU, which is the fact the UK government is reportedly looking into new laws that will change previous agreements made with the EU

The Financial Times reported that the government is to publish a bill on Wednesday that will override the previous deal struck to prevent a hard border between Northern Ireland and the Republic of Ireland. This deal was deemed to be crucial for the EU to ensure a trade deal between both countries.

While there are only two rounds of talks left before the October 15 meeting, some economists still believe a deal will be reached by the end of December. One reason is the fact the UK is struggling with the deepest recession of any major economy and a no-deal could be the tipping point for a country still reeling from the coronavirus.

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