- GBP/USD is offered and testing back below the 1.23 handle.
- Brexit worries cloud over the Pound.
There are a few news wires circulating around the EU apparently not considering or even discussing a time limit on the Irish Backstop, creating a wave of selling in the Pound as we head towards the 11th hour and the Brexit deadline at the end of this month.
UK Prime minister Boris Johnson had promised to renegotiate Britain’s current withdrawal agreement and demanded the abolition of the Irish border backstop arrangement which is designed as an insurance mechanism to prevent a hard border on the island of Ireland regardless of the future EU/UK trade relationship.
This has been a major sticking point where a solution has been hard to come by, leaving a red line between the EU and UK being able to agree upon a withdrawal deal so far to date, subsequently weighing heavily on the Pound considering if no deal is reached, or another extension is made, then the UK will be falling out of the EU without a deal on the 31st of this month by default.
Back to the backstop, and now back to the drawing board
Meanwhile, RTE reported on Monday night that Mr Johnson’s plan to replace the backstop could include “customs clearance sites” on both sides of the border between Northern Ireland and the Republic of Ireland. However, this plan seems to be a non-starter at the get-go – Ireland’s deputy prime minister dismissed it as being so in a tweet just before midnight where he said it was the time that the EU and Ireland had a “serious proposal”. So, nothing here to curb the pessimism over Brexit negotiations and a general election looks to be on the cards – So, yet further unclarity and more clouds building over the Pound.
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