Trade Analysis & Reviews: 12.11.2018 - The lack of a Brexit deal...

12.11.2018 10:04 AM

The lack of a Brexit deal pushes the pound into the abyss

The pound sterling fell on Friday, as investors began to doubt the recent optimism about the upcoming Brexit deal.

Last week, the pound was trading at $ 1.3176, which was a three-week high after Britain seemed to be close to concluding an agreement on secession from the European Union.

Before an agreement is reached, there is still a lot of compromises to avoid the hard border separating Northern Ireland (British province) from Ireland (EU member state). Last Friday, it became clear that the path would not be easy, there are still many problems, and the pound lost more than 0.5% against the dollar. It is likely that the pound will roll down against the background of the lack of prospects for a deal between London and Brussels to continue this week, which will lead to the closure of short positions on the pound.

As for the Bank of England, key rate and its prospects, analysts say that Brexit overhang will significantly limit the growth prospects for the British key rate. Note that the increase in the base rate of the Bank of England would help the pound to grow against all major currencies. According to analysts, the growth rates until May 2019 looked "very unlikely."

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*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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