Pound hurt by further Brexit deal uncertainty
No-deal still not off the cards, leaving traders braced for more volatility
The rise in the value of the pound (GBP) that took place last week has not continued, as hopes for a Brexit deal diminish.
The GBP/USD conversion peaked earlier at $1.2632, but sank throughout the afternoon to around $1.2564, down 0.65 per cent on the previous close. The GBP/EUR exchange followed a similar pattern, closing at €1.1394.
Sterling had skyrocketed last week after a surprise announcement that the European Union and the UK had resumed talks to find a suitable withdrawal agreement for Britain’s scheduled departure on October 31.
This announcement caught many, including the Westminster commentariat, off guard and led to the largest two-day rise in the value of sterling for several years.
Currency traders are currently bracing for more short-term sterling volatility as every day hopes are raised and slashed. The latest positioning data indicates historically significant extreme short positions, emphasising the fact that no-deal Brexit is not off the cards, even if delay seems likely. The bumpy ride continues.