Sterling has come under pressure during Friday’s trading, despite an announcement that EU leaders have agreed to move Brexit talks on to the second phase.
The news was confirmed by European Council president Donald Tusk and will put to rest any concerns investors had that talks were still not progressing as indicated.
This could possibly have been seen as a reason for a spike in investor confidence but further reports have indicated how hard the next round of talks are likely to be.
What’s next for Brexit negotiations?
We are now entering the key components of the UK’s separation from the EU and what relationships will remain, particularly in terms of what trade deal the UK will be granted with its closest neighbours.
We are likely to see tensions rise and I would be surprised if this didn’t have a negative impact on Sterling’s value over the coming months, considering the amount of pressure previous uncertainty surrounding Brexit negotiations has caused.
The first round of negotiations was far more tedious than most experts had predicted and it does make you concerned about how we will negotiate the next phase. This may go some way to explain the fall in Sterling value of late, now that the markets are factoring in the amount of time it could take to reach further level ground with previous experience taken into account.
A close and open trade deal is key for the UK’s economic well-being. Ultimately Sterling’s value over the coming months and even years could hinge on the outcome of this.
Whilst these concerns remain, we have at least seen the Pound gain a foothold in the market over recent weeks. Those with a pending currency transfer would do well to keep themselves informed of new developments around Brexit negotiations as it continues to have a profound effect on the value of the Pound, with any major upturns for Sterling in the short term looking less and less likely.