Pound Set for 2nd-Straight Weekly Slump as No-Deal Brexit Fears Rise

12 September 2020, 06: 00
 
The pound is set for second-straight weekly slump on Friday, as no-deal Brexit fears persist after the U.K. Prime Minister Boris Johnson reportedly pushed ahead with a bill that would seek to override the withdrawal deal despite threats from the EU.
 
GBP/USD fell 0.07% to $1.2738, and looked set for it worst week since March.
 
Johnson attempted to whip up demand for the internal market bill on Friday, telling lawmakers the legislation was "necessary to stop a foreign power from breaking up our country," and insisting there was "no time for questions," the Guardian reported. The prime minister faces rebels from his own party, who have tabled an amendment that would give Parliament the right to veto the bill.
 
The move comes just as European leaders threatened to abandon a U.K.-EU trade deal if the prime minister moved ahead with the legislation.
 
The bill, published on Wednesday, seeks to create common rules that apply across the whole of the U.K. including England, Northern Ireland, Scotland and Wales. It would likely clash with key terms of the withdrawal agreement requiring that Northern Ireland, in the post-Brexit period, follow EU rules in order to avoid a hard border with the Republic of Ireland.  
 
Emergency talks this week to break the deadlock appear to have stalled, with EU Brexit negotiator Michel Barnier conceding that "significant differences remain in areas of essential interest for the EU."
 
In another sign that both sides are preparing for a no-deal, or hard Brexit, Barnier said that while talks would continue over the coming days, the "EU is intensifying its preparedness work to be ready for all scenarios on 1 January 2021."