By Yasin Ebrahim
Investing.com – The pound continued to boost gains against the dollar and withdrew from the declining hopes of progress in the Brexit negotiations, after Germany reportedly scrapped plans to continue negotiations, citing a lack of recent progress, according to British media reports.
increased 0.49% to 1.3207.
The German government scrapped plans to discuss Brexit during a meeting with EU ambassadors on Sept. 2, the Guardian reported. “As there has been no concrete progress in the EU-UK negotiations, the Brexit point was removed from the agenda,” the Guardian reported, referring to an EU diplomat. The news comes as a blow in the hope that both parties will break the deadline in the post-Brexit talks, which are set to resume on 7 September.
But the pound, which has risen about 16% against the dollar since March, has moved in line with risk values such as equities, easing concerns about the risk of a Brexit without negotiations – the UK leaves the European Union without a deal. This resilience in the wake of seedy talks after Brexit is unlikely to continue for long, Morgan Stanely warned.
Sterling “prior positive correlation with risk markets has begun to fade, suggesting that even in light liquidity, the market appears to be closing historically short GBP positions,” Morgan Stanley (NYSE 🙂 said. “We believe the GBP / USD will be driven more by the GBP side of the pair in October / November as our economists expect more progress with the Brexit negotiations.”
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