LONDON, Aug 23 — The pound today gave back some of the gains it made the day before as investors reassessed whether British Prime Minister Boris Johnson had made any progress in convincing the European Union to renegotiate the Brexit withdrawal agreement.
German Chancellor Angela Merkel’s comments yesterday that a solution to the Irish border question post-Brexit could be found before October 31, the deadline for Britain to leave the EU, triggered a sharp rally in the pound.
But many analysts said the comments reflected market positioning rather than any confidence Britain and the EU would renegotiate their agreement to avoid a no-deal Brexit.
“The market is very short and that is naturally going to make the market very sensitive to any news (that makes them think)...have we got this wrong?” said Jane Foley, a strategist at Rabobank.
“I’ve not read an awful lot into these moves,” she said, adding that thin summer liquidity had exacerbated this week’s volatility.
Sterling fell 0.5 per cent to US$1.2197 (RM5.11) today, retreating from the three-week high hit yesterday.
Versus euro the pound was down 0.4 per cent on the day at 90.770 pence. — Reuters
