- Pound (GBP) adds to yesterday’s Brexit inspired losses
- EU warn PM not to tamper with Brexit bill
- US Dollar (USD) holds mild gains from previous session as it looks past tech rout
- No high impacting US data due today
The Pound US Dollar exchange rate (GBP/USD) is trading at two-week lows, as it extends losses from the previous session. The pair settled on Monday -0.6% at US$1.3166. At 06:15 UTC, GBP/USD trades -0.2% at US$1.3136, a level last seen on 26th August.
The 8th round of Brexit talks will kick off today in London. Britain is set to tell the EU that if progress isn’t made in trade talks this week then the British government will step up plans to leave the EU without a deal on 31st December.
This latest ultimatum comes after Boris Johnson injected some urgency into the talks by setting a deadline for a deal to be achieved by 15th October. Reports also surfaced yesterday that the government is planning new legislation to override parts of the Brexit divorce treaty. The EU responded by threatening to pull from any trade talks if that was the case.
The latest developments underline how strained relations between the two sides are. The chances of a trade deal appear to be slipping away, which is keeping the Pound out of favour. Without a deal, trade between the EU and the UK could collapse overnight, causing chaos in businesses and markets.
The US public holiday trade saw the US Dollar tock marginally higher in the previous session and it is holding on those gains heading towards the open in London.
The US economic calendar is sparse today and so far, risk sentiment is fairly even, as investors attempt to look beyond a huge rout in US tech stocks. The same big names such as Apple, Amazon, Netflix and Tesla which drove the Nasdaq to record high levels are now part of a steep sell off.
Investors will be looking ahead to the release of jobless claims data and US inflation at the end of the week.
