Pound Money Declines, Brexit Concerns Intensifies | Wibest

After its strong uphill rally last week thanks to the UK election, the pound extends its decline today. The reason? None other than Brexit fears, of course.

Investors are backing up as Brexit risks start to resurface as the election hype dies down. Last week, the GBP received a powerful jolt, which paved the way for it to gain more than 1% on Friday.

The sterling has lost all its gains from the election week as of today’s trading. Yesterday, the pound money crumbled in sessions, dropping against all major currencies in trading sessions.

Today’s fall may not have been as steep yesterday, but still, sterling traders are concerned whether it will continue to contract.

The GBP USD exchange rate fell by 0.14% or 0.0018 points in today’s trading sessions. In fact, prices have plunged as low as $1.3072 from its last close of $1.3128.

With the pound money’s poor performance, traders are looking at other assets like the Canadian loonie and single currency.

Outlaw Brexit

Local media reported yesterday that Boris Johnson will legislate to avoid any extension on the transitional period or Brexit. The British Prime Minister and his government will block an extension beyond 2020.

According to reports, any plea to extend would increase the odds of a no-deal Brexit.

This immediately raised concerns about the risks that come with a no-deal Brexit. His words caused the pound money to collapse in recent trading sessions.

Johnson’s plan would mean striking a deal with the members of the European Union in only 11 months. A feat deemed by some EU members and experts as a long shot.

A senior government official from the United Kingdom commented that the new Withdraw Agreement Bill will restrict any extension plea. They also added that the government has already made it clear that it will not extend the implementation period.

This is a huge risk for the British government because, as mentioned above, some EU leaders are skeptical about the tight timeline. This could also jeopardize the pound money considering if both powerhouses ultimately divorce with a deal.