The British pound is under further pressure today after yesterday’s disastrous outcome on talks between the UK and the EU on conditions for the former to leave the European Union.
At 1.04pm (GMT) the British currency was trading at $1.3416 after trading as high as $13538 in yesterday’s trading session.
Markit services PMI from the UK hit the market earlier today at 53.8, below analysts’ expectations for a figure of 55 and well down on last month’s figure of 55.6.
The news only added to the pounds woes from yesterday when investors were left in shock as Theresa May failed to reach an agreement with the EU on critical points including how they would handle the border issue between Ireland, which will remain a member of the EU and Northern Ireland, which is part of the UK.
In the event of a non-agreement, the market was expecting the pound to fall a lot further but it seems with support moving in this morning around the $134 mark, many believe that an a agreement will be forged later this week
“Sterling continues to nurse its bruises from the news from Brexit talks,” said Valentin Marinov from Credit Agricole.
“The price action in the currency markets may suggest that a constructive outcome from the negotiations is still possible.” He added.
These thoughts may be a little optimistic as many see the deadline for a deal to be reached is this Friday and if one is not done, the chances of further progress at the EU summit on December 14th look to be quit slim.