Sterling Slides as Brexit Talks Encounter Another Roadblock

The Great Britain pound dropped today after the Brexit talks planned for yesterday failed to yield a result, collapsing at the last minute. The fact that growth of Britain’s services sector slowed more than was expected did not help the currency either.

Hopes were high yesterday for the meeting between British Prime Minister Theresa May’s lunch and European Commission President Jean-Claude Juncker. Yet May had to cancel the talks after a phone call from Arlene Foster, leader of the Democratic Unionist Party, who objected the May’s proposal to keep Northern Ireland in the European customs union, while the rest of Britain will leave it. Foster said that any rules that separate Norther Ireland from the rest of the United Kingdom are unacceptable. The DUP is May’s coalition ally that allowed the Prime Minister to form a majority government.

The seasonally adjusted IHS Markit/CIPS UK Services PMI slid to 53.8 in November from 55.6 in October. Analysts were anticipating a smaller drop to 55.2.

GBP/USD was down from 1.3478 to 1.3406 as of 11:23 GMT today but bounced from the daily low of 1.3370. EUR/GBP traded at 0.8851 after opening at 0.8810 and reaching the daily high 0.8867. GBP/JPY declined from 151.47 to 150.77.

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