Sterling is heading for its biggest loss since October after Michel Barnier, the EU’s chief negotiator, warned that a Brexit transition period was not on the cards if a number of disagreements persisted. The latest round of Brexit talks appeared to stall around the issues of the role of the European Court of Justice and citizens’ rights.
The pound tumbled in response as the tone shifts towards a harder Brexit.
Neil Jones, head of hedge fund sales at Mizuho Bank said in Bloomberg: “Some suggest a soft Brexit is indeed dead leaving a hard or a very hard option. The pound should continue to trade lower on the crosses.”
Sterling is down 0.6% at $1.3836 at 9:25am EST after Barnier’s comments to reporters in Brussels.