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Pound Falls as UK Faces Deadlock on Brexit Trade Talks

The British pound took a beating on Monday as the U.K. faces concerns over a new coronavirus strain as well as uncertainty stemming from Brexit trade deal negotiations.

Over the weekend, the U.K. said it had identified a new strain of Covid-19 which spreads more quickly than previous variants. Following that announcement, other nations said they would be temporarily restricting travel from the U.K. in efforts to prevent the new strain from entering their borders. The British government has already ordered an even stricter Covid lockdown in London ahead of Christmas.

Pound Falls as UK Faces Deadlock on Brexit Trade Talks

As of 06:34 GMT, the British pound fell more than 1% to $1.3349, as compared with levels around $1.36 seen last week. Meanwhile, the euro also declined to $1.2184 after breaching the $1.225 level last week.

The currencies have recently fluctuated around headlines related to Brexit trade deal talks. Britain and the European Union remain in a deadlock as a Dec. 31 deadline looms, with disputes over issues such as fisheries plaguing negotiations.

Still, analysts told CNBC on Monday that they remain bullish on the pound going into 2021 despite headwinds the currency faces.

Source: FXPro

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