Pound drops as UK insists they will not follow EU rules in any future deal
The Pound has come under selling pressure today as the UK published its negotiating mandate ahead of the key Brexit trade talks.
The UK stated that a trade deal with the EU should not require the UK to follow EU standards and that if they fail to agree a broad outline of a deal by June then “the UK will decide whether to switch focus to domestic preparation for an orderly end to the transition period (i.e. no-deal preparations)”. In stark contrast, the EU have said that a free trade deal will only be possible if there’s a ‘level playing field’ with the UK following the EU rules.
This hard-line stance from the UK, with threats of walking away if talks go south within the next few months, has reminded the market that the talks are going to be challenging and there is still some probability of a no-deal outcome.
As a result, the Pound has lost around 1-cent against the Euro today with the GBP/EUR now trading at a 2-week low. The GBP/USD is down over 1% from Tuesday’s high and trades at a 1-week low towards the bottom of the current short term range.