Pound Sterling Hits Choppy Waters Before Brexit Deal

The Pound Sterling is having a hard time keeping its balance, as talks around Brexit have to lead to Ireland refusing to come in terms with its proposition over Irish Border checks. While the EU economy’s future remains uncertain over the Brexit deal, Sterling, which had shot to five-month highs, fell as much as 0.6% against the dollar to $1.2748 GBP=D3 and 0.5% against the euro to as low as 86.81 pence EURGBP=D3, before steadying and regaining some ground.

Then there is no surprise in the fact that the rest of the world currency has not moved up or down. The pan-European STOXX 600 has not seen any shift. In bond markets, UK Gilts GB10YT=RR, German Bunds DE10YT=RR, and most other government debt have been seen to be treading water after a week of rising yields.

Sellers are restless to sell but an extension in the Brexit deadline would be most favorable for everyone.   Meanwhile, the US market has already started showing signs of distress as retail sales fell for the first time in seven months.  Political analysts feel this can be attributed to a weakening manufacturing industry, whose effect is following all over the economy. “While the U.S. suspended a hike in tariffs, it hasn’t gone as far as scrapping the tariffs altogether, so it is hard to expect a quick pick-up in the economy,” Yoshinori Shigemi, global market strategist at JPMorgan Asset Management has said to the Reuters.

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