The United Kingdom and the European Union has kicked off the formal Brexit talks and things couldn’t get better for the British pound as investors are bringing the currency on the downward direction amid uncertainties surrounding UK’s controversial decision to divorce with the continental bloc.
With high volatility prevailing, there is nowhere to go for the sterling but down.
On Tuesday, the pound remained on the losing side and settled to its lowest level not seen in six days after it shed 0.46% against the US dollar at 1.3414 per greenback while sliding 0.38% against the euro at 1.1312.
The pound has given up major gains earned last week as investors avoided the currency due to the ongoing negotiation concerning Brexit. Last week, sterling cruised to its two week high at 1.1351 against the US dollar before falling to 1.1326 on Monday.
The losing streak was prompted by the announcement that the UK government and the EU has yet to reach a final agreement about the Irish Border, one of the three major issues that has to be settled so that transition period can push through.
UK’s Prime Minister Theresa May flew to Brussels to discuss the Irish Border with Jean Claude Juncker, the President of the European Commission, but both failed to seal the deal on the issue despite rigorous efforts.
On December 14, the leaders of Europe will rub knees and elbows as they meet to formally discuss post-Brexit trades.