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Pound US dollar exchange rate: GBP drops after EU leaders condemn May’s Brexit plan


This decline has been caused by Thursday’s developments in Salzburg, where Prime Minister Theresa May’s Brexit proposals were condemned by EU leaders.

European Council President Donald Tusk dismissed the ‘Chequers plan’ revealed in July.

He said: “The suggested framework for economic co-operation will not work. [It] risks undermining the single market.”

Speaking after this latest humiliation for Mrs May at the EU summit was Irish Prime Minister Leo Varadkar.

He said: “Time is running short. We want to avoid a ‘no-deal Brexit’, but we are preparing for that.”

An additional blow came from French President Emmanuel Macron, who branded Brexiteers as ‘liars’.

He said: “The Chequers plan cannot be ‘take it or leave it’.

“Those who explain that we can easily live without Europe, that everything is going to be alright, and that it’s going to bring a lot of money home are liars.”

Over in the US, the US dollar has risen by 0.4 per cent against the pound despite continued uncertainty about the US-China trading relationship.

The latest update is that China is supposedly cutting tariffs on some imports, excluding those from the US.

Bloomberg’s report on the matter quotes Nicholas Lardy of the Peterson Institute of International Economics.

He said: “This is in line with China’s longstanding strategy of opening [its markets].

“It has the additional advantage that it will make US firms complain more loudly that Trump’s strategy is blocking their access to the China market.”

Ironically, the US dollar may have risen precisely because of this deterioration in trading conditions, as risk is increased and safe haven demand could be pushing traders to the US currency.

Today’s main economic data will come from the US, with marketing, services and composite PMI readings due out this afternoon.

All three readings are expected to show a faster pace of economic growth, which could mean that the US dollar rises further against the pound before the weekend.



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