The British Pound Continued To Fall

The British Pound Continued To Fall

The British pound continued to fall this week, losing more than 1% against the dollar. The reason was another warning from the British Prime Minister Boris Johnson that Brexit without an agreement is "very probable". The head of the European Commission, Ursula von der Leyen, also expressed skepticism about reaching a trade agreement with Britain. The pound depreciated by 1.2 percent in the afternoon to 1.3135 USD / GBP, its worst since mid-November. The euro strengthened against the pound by almost 1% to 0.9220 GBP / EUR, which was the highest since September. Britain withdrew from the European Union (EU) in January, but remains a member of the single market and customs union by the end of this year. Both sides are currently negotiating the shape of future relations, but negotiations have reached a dead end. According to Leyen, the scenario that the EU and Britain will not reach a trade agreement is more likely than concluding an agreement. Johnson called the no-agreement scenario "very, very likely." In this case, trade between the EU and Britain will be regulated by the rules of the World Trade Organization (WTO) from the beginning of next year, which means the introduction of tariffs and other trade barriers.