The British pound fell versus the U.S. Dollar and common currency Euro during early trade in Europe on Tuesday. This follows news reports, and reiterates the Prime Minister's stance, that plans to take a hard line on the upcoming Brexit. Boris Johnson has long said that there would be no postponement beyond the January 31st deadline, and that the UK would leave by year's end regardless of the government's ability to strike a deal with the EU.
In London at 11:12 am, the EUR/GBP was trading higher at 0.8450 Pence, a gain of 0.922%; the pair has traded from a trough of 0.83524 Pence to a high of 0.84722 Pence. The GBP/USD was trading at $1.3199, a loss of 0.8945% and off the earlier low of $1.31547.
Johnson Stance a Surprise
Analysts say that Johnson's hard-line stance should not come as any surprise to traders. However, there were some who felt that he might be more accommodating and willing to take a moderate approach. Analysts do not believe that the UK government will succeed in crafting a favorable and comprehensive trade agreement with the EU in just 11 months. That is once again raising the specter of a hard Brexit and sending jitters through the FX market.