The UK pound is leaping down as the Brexit transition period draws to a close. The pound has hit a five-and-a-half-month low.
Brexit news overcame this with data showing a new trade agreement with Japan and the recovery of the economy. But the pound is facing its worst week since mid-March against the euro and the dollar. At the peak of Covid-19 pandemic sales, the pound lost 4% against both currencies.
Against the euro, the sterling fell 0.6 percent to 0.9285 pence. The pound was down 0.3 percent at $ 1.2770.
The assessment is that the pound was subdued by the events surrounding the unilateral decision to withdraw from the Brexit withdrawal agreement.
As the day went on, the euro surged past Sterling, breaking the 92-pence mark and pushing the euro soaring. The euro has become the strongest and most valuable currency since the flash crash of October 2016.
Ordinary consumers in Ireland will benefit from the weaker pound depreciation and it is also useful for travel, shopping and buying goods.
The world’s largest investment bank had earlier predicted that the value of sterling would fall below the euro by 2018.
Sterling had reached the 90P stage during the flash crash. This put a lot of pressure on Irish exports. The value of the sterling was six per cent lower than the dollar. The euro and sterling fell sharply during the 2009 financial crisis.
The potential for a no-deal is growing every day, said Closborder, the global chief economist. According to Morgan Stanley, the chances of Britain leaving the EU during the transition period have risen to 40 per cent under WTO rules.
Despite the news of the first trade agreement with Japan since Brexit, there has been no significant change in the economy. The new agreement will eliminate 99% of tariffs on exports to Japan.
Meanwhile, the UK’s economic output rose 6.6 percent in July, hitting a record low of 20 percent in the second quarter, according to the Office for National Statistics.