The ongoing Brexit trade negotiations hit another deadlock further contributing to the decline seen in the British Pound Sterling.
The Pounds Sterling appears to be taking more of the hit in a new development that saw the UK announce the discovery of a new COVID-19 strain amid a deadlock on the ongoing Brexit trade talks. Per a report from CNBC, the United Kingdom said it had discovered a new strain of the novel COVID-19, also known as the coronavirus and that this new strain spreads more quickly than previous variants.
For about a year that the COVID-19 was first discovered in Wuhan China, the entire world has witnessed an economic turmoil that has seen quite a number of big economies like the United Kingdom slip into recession. The medical and pharmaceutical world has been strained as the former deployed all resources to care for those infected, while the latter fought hard to develop a functional vaccine for the COVID-19 virus. The efforts appear to have paid off thus far as the UK began inoculating its citizens with a COVID-19 vaccine developed by Pfizer Inc (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) earlier this month.
Now that a new strain is out, a new challenge has been presented and other nations are temporarily banning inbound travels from the UK to prevent the new strain from spreading into their shores. This move complements the ongoing comprehensive lockdowns that London is currently plunged into. The entire economic realities in the UK has caused a plunge in the British Pounds Sterling.
Per the CNBC report, as of 06:34 GMT, the British Pound fell more than 1% to $1.3349, as compared with levels around $1.36 seen last week. Meanwhile, the euro also declined to $1.2184 after breaching the $1.225 level last week.
Influence of Deadlocked Brexit Trade Talks on the Pounds Sterling
The ongoing Brexit trade negotiations hit another deadlock further contributing to the decline seen in the British Pound Sterling. This latest deadlock according to the reports was sparked due to disputes over fisheries in the waters surrounding the UK.
Despite this deadlock, however, analysts are projecting that both the European Union and the United Kingdom will be able to reach a Brexit Trade deal as either side approaches the December 31st deadline. These analysts thus are projecting a bullish performance for the Pound Sterling in the next months.
“We should expect some volatility for the pound and what we’re seeing this morning is reflective of that,” Rodrigo Catril, senior currency strategist at National Australia Bank (NAB), told CNBC’s “Squawk Box Asia” on Monday morning.
Gareth Berry, Macquarie Group’s managing director, and foreign exchange and rates strategist also noted that he expects the Brexit Trade talks to hit a positive headway by the end of the week.
“That should lead to a deal that all sides can live with and that can ultimately be ratified the following week in time for that Dec. 31 deadline,” said Berry. “Sterling should love that, and that’s one reason why we’re quite bullish … on sterling for the next few months.”
Want to know more about the situation in the markets? Stay tuned with Coinspeaker.