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GBP/USD & GBP/JPY Set For Yearly Lows amid Latest Brexit News

GBP/USD & GBP/JPY Set For Yearly Lows amid Latest Brexit News

Attempts by new UK Prime Minister Boris Johnson to reframe the Brexit negotiations appear to be falling on deaf ears in Brussels.

It’s too soon to dismiss the possibility that a no deal, hard Brexit could ultimately lead to a complete dissolution of the UK vis-à-vis another Scottish independence referendum.

Retail trader positioning suggests that the British Pound may be under more pressure heading into the final days of July - ForexLive.

It’s only been a few days into the tenure of UK Prime Minister Boris Johnson and expectations about Brexit are already starting to calcify. The new UK prime minister has come out with strong words, saying "If an agreement is to be reached, it must be clearly understood that the way to the deal goes by way of the abolition of the backstop." This may be a fraught attempt at reframing the Brexit negotiations.

Brexit Hasn’t Been and Won’t Be Good for Sterling

Unfortunately for UK PM Johnson, the Brexit negotiations involve a counterparty, in this case, the EU. EU’s chief Brexit negotiator Michel Barnier said yesterday that UK PM Johnson’s combative was proving divisive. European Commission President Jean-Claude Juncker called the existing deal “the best and only agreement possible,” or in other words, a renegotiation would not occur.

The mere prospect of the UK leaving the EU has been extremely harmful to the British Pound. Losing more than 20% against most of its major counterparts since the June 2016 Brexit vote, the British Pound is unlikely to recover any significant value so long as the UK is poised to leave the EU. Comments from UK PM Johnson, EU Brexit negotiator Barnier, and EU Commission President Juncker would suggest that a no-deal, hard Brexit outcome is the most likely outcome.

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