The pound has slumped at the start of the new week as it’s revealed the UK could be set to leave the European Union without a trade deal in March 2019.
Consequently, sterling is now trading near last week’s lows following a fall over 1.28 per cent against the euro.
Experts have warned that the pound will continue to be “at the mercy of Brexit” this week due to a limited amount of data due to emerge.
The pound is currently trading at €1.114 against the euro, according to Bloomberg
Jason Heppenstall, currency analyst at TorFX, spoke to Express.co.uk regarding the latest exchange rate figures.
“Sterling ended the week punch drunk after investors dumped their pound holdings in response to the EU’s unanimous rejection of Theresa May’s Brexit plans.
“The pound lost over a cent against the euro on Friday despite the prime minister’s reassurance that she would continue to pursue a deal with the EU.
“There’s not an awful lot of data to move Sterling this coming week, so the pound will likely remain at the mercy of Brexit news for the next few days.“
Theresa May failed to make any improvement at the EU summit in Salzburg last week.
As a result, many have claimed that Theresa May’s latest Chequers plan “won’t work.”
President of the European Council Donald Tusk stated that while there were “positive elements” to her proposal, it wouldn’t work as it “risks undermining the single market.”
Last week, Transport Secretary Chris Grayling threatened that the UK could leave the EU without a deal unless the EU is willing to compromise in talks, particularly regarding the Irish Border.
Speaking to the BBC Mr Grayling said: “At the moment what the European Union is asking in and around Northern Ireland is simply impossible for any UK government to accept.
“And actually if they stick with that position, there will be no deal.”
Jason Heppenstall commented on Friday: “First off it was some better-than-expected retail sales that gave the pound a shot in the arm, and later in the day the currency received a boost from an ailing US dollar.
“It didn’t do so well against the euro due to deadlock at the EU summit over the Irish border issue, despite some pretty poor consumer confidence figures coming out of the Eurozone.”
UK retail sales were better than predicted, according to the Office for National Statistics (ONS).
While a 0.2 per cent drop was estimated, sales were up 0.3 per cent instead.
This is despite the previous strong month in July thanks to the heatwave and the World Cup.
Meanwhile euro investors are likely to be focused on the Eurozone’s latest CPI figures this week, with another robust inflation reading potentially bolstering the euro at the tail end of the session.
