Investing.com – The pound reached a new low in two years on Tuesday, while the refusal of the United Kingdom or of the European Union to modify its negotiating positions increased the risk of “Brexit” without agreement on 31 October.
To 09.45 am, the pound was slightly adjusted to 1,2172 against the dollar and 1,0924 against the euro, down 0.4% and 0.4%, respectively. At the opening, however, it had dropped to 1,2120 dollar and 1,0881 euro.
The book now has lost 2.2% against the dollar over the last week and 3.8% last month, while the prospect of a “Brexit hard” is passed an event risky – according to the words of the british minister Michael Gove – “the working assumption” of the government.
The new Prime minister Boris Johnson said Monday that he would not meet with other european leaders at least that the latter did not agree in advance to withdraw the controversial provisions of the “backstop irish” of the withdrawal agreement negotiated by his predecessor, Theresa May. EU officials continue to insist that the withdrawal agreement, which was rejected three times by the british parliament, is not reopened.
At the request of the United Kingdom, the so-called “safety net” has been inserted in the agreement to ensure the continuation of the cross-border trade smoothly after the Brexit, and thus to prevent the recovery of a frontier farm between the Republic of Ireland and the british province of Northern Ireland.
Earlier, the Bank of Japan has left its key rate unchanged at-0.1%, as expected, but revised its inflation forecasts and repeated its guidance that “it will not hesitate to take further easing measures if it is possible that the momentum towards the achievement of the objective of price stability to be lost.”
The yen has slightly strengthened to rise to 108,69 against the dollar.
Data released earlier in the day had provided additional evidence of the global slowdown in the manufacturing sector, the japanese industrial output fell more than expected, by 3.6% in June.
The european day began with the disappointing numbers from France, where the gross domestic product growth slowed to 0.2% in the second quarter, due to a slowdown in household consumption. Economists had expected that growth would remain at 0.3%.
The dollar was in waiting, as traders await information from the first day of a new round of trade negotiations between the United States and China – and, of course, the beginning of the policy meeting to two days of the Fed later in the day.
The dollar index, which compares the greenback to a basket of currencies, has reached a new peak of two months, 97,958, before falling back to 97,905.