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John Wang
in
Forex
May 15 21:12

GBP returns to the pariah status

  British currency is among the most volatile in the world.
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British Pound is once again the pariah on forex market. The reignited Brexit-related risks turn the traders away from the currency.

The pound is falling for the fifth day straight on May 15. The last negotiation session between the EU and the United Kingdom will most likely end without any significant progress. Both sides are not ready to find compromise on their key positions. The Prime Minister even threatened to walk out on the negotiations if he does not see sufficient progress. 
All these and other factors are making the free-trade deal less likely. The risk adds additional pressure on the economy that is already experiencing its deepest contraction in modern history.  
This week the pound lost 1.7% and is trading at about US$1.22. The currency is headed for its steepest reduction in the last two months. Ned Rumpeltin - the Toronto-Dominion Bank’s head of currency strategy - claims that if the trading is going to close under US$1.2166, the plunge will continue.
The pound is slowly approaching the volatility levels of the emerging economies. It is already the second most unstable currency of the G-10. Norwegian krone holds the first place at the moment.