GBP/USD Slides Lower After Johnson Insists on Ending Post-Brexit Transition Period on Dec 31, 2020
Early on Tuesday, the Pound has slid lower against the US dollar over emerging reports that PM Boris Johnson is insisting on a hard deadline at the end of the transition period after Brexit. At the time of writing, GBP/USD is trading around 1.329.
The Brexit Bill with the latest version of the withdrawal agreement finalized between Johnson and the EU maintains that the transition period will end on December 31, 2020. Johnson is keen to keep this deadline as a final one by when Britain and the EU will have to finalize a trade agreement.
With Britain set to leave the EU on January 31, 2020, this leaves less than a year’s time for negotiations on a free trade agreement with the Union, heightening uncertainty on whether this will work out in favor of Britain. Political leaders from the EU have expressed concern previously on whether Britain and the EU will be able to finalize a trade deal within such a short period of time.
Markets appear unhappy about Johson’s hard deadline, which has weakened the Pound, as uncertainties remain on whether the trade agreement reached will be adequately comprehensive and support a positive trade relationship between the EU and Britain after Brexit.
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