Pound hit by renewed hard Brexit fears after Johnson's tough talk
Sterling fell sharply on Monday after Prime Minister Boris Johnson set out tough terms for European Union talks, rekindling fears Britain would reach the end of an 11-month transition period without agreeing a trade deal.
According to Press TV, the sides have until the end of the year, when a standstill transitional period expires, to secure a deal on trade and future relations but Johnson is striking a tough tone, saying Britain will not adhere to the bloc’s rules and regulations.
The EU on the other hand has warned Britain that access to its single market of 450 million people will depend on how far London agrees to adhere to such rules on environmental and labour regulations.
“Sterling appears to be coming off on the not very encouraging signs from the two sides at the start of the negotiations. They are positioning themselves at two extremes,” said Adam Cole, Chief Currency Strategist at RBC Capital Markets in London.
The moves came as risk appetite stabilized following big falls on Chinese markets, as Beijing took steps to shore up the economy hit by travel curbs and business shutdowns because of the coronavirus outbreak, including cutting interest rates.