Brexit Tensions Cause Pound to Drop As US Dollar Surges

On Friday, the Pound lost ground against most of its peers as Brexit tensions increased after France detained a British fishing boat.

The UK also triggered a committee to discuss the outcomes of the activation of Article 16, with a deadline of the end of November being put in place for negotiations. So, as the week came to an end, the currency finished at 1.1837 against the Euro and 1.3685 against the US Dollar according to the Foreign Exchange Market.

The Euro also slumped on Friday after a heavy-sell of was seen after the US Dollar soared, causing a negative correlation to develop between the two currencies. This slump meant that any gains from the European’s Central Bank decision on Thursday were lost along with the gains seen following the positive gains seen in the Eurozone CPI figures.

The US Dollar soared on Friday and this was put down to an end-of-the-month correction prior to the Federal Reserve meeting this week. It is expected that the Fed will announce tapering plans and this help to give the US Dollar a boost on Friday and it could help to offer support this week too.

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