GBP/EUR sinks on speculation Brexit trade talks will be ‘very difficult’

Mr Barnier also highlighted the growing concerns that the UK could renege on its Brexit pledges to Northern Ireland. He said: “[T]here are reasons for us to remain vigilant because the British minister in charge of Northern Ireland has come up with some very surprising statements.”

Meanwhile, Prime Minister Boris Johnson’s official spokesperson hit back against the EU, insisting that the bloc must respect the UK’s right to have “legal authority” post-Brexit.

Sterling has weakened on growing fears over the possibility of no-deal between the UK and the EU being reached before the end of the transition period. 

In UK economic news, today saw the release of the BRC Shop Price Index for January, which fell by -0.6 percent due to flagging consumer demand.

BRC Chief Executive Helen Dickinson was positive about March’s budget, however, saying: “The upcoming Budget presents an excellent opportunity to address the broken business rates system, starting with transitional relief, which has forced retailers to subsidise other industries by nearly £500 million since 2017.”

Today also saw French consumer confidence for February beat expectations and remain at 104. The report buoyed market appetite for the single currency as the Eurozone’s third-largest economy’s economic outlook improved. 

However, as Italy remains a key concern due to a recent outbreak of the coronavirus, the euro’s gains are likely to remain short-lived as global recession fears threaten to weaken the Eurozone’s economy. 

Looking ahead, investors will be focusing on a speech by Luis De Guindos, the Vice-President of the European Central Bank (ECB). 

Any hints of further stimulus measures to boost the flagging Eurozone’s economy could prove euro-negative. 

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