Sterling decreases as fears increase as there is no contract

Sterling decreases as fears increase as there is no contract

On December 6, 2020, a lorry passes through security at the port of Lorne in Co Antrim, Northern Ireland.

Paul Hope | AFP | Getty Images

London – Sterling Extended losses against the US dollar on Monday came amid fears that the UK and EU negotiators may fail to reach an agreement before the end of a transition period later this month.

The UK currency traded at 32 1.3230 during the morning trade, down 1.5% per session.

Negotiations between the UK and the EU are set to resume later, with British Prime Minister Boris Johnson expected to hold talks with European Commission President Ursula van der Leyen.

Both sides are trying to iron out the terms of the post-Brexit trade agreement. The UK and the EU have cited progress in some areas, but there are differences over fishing rights, so-called “level playgrounds” and how future conflicts can be resolved.

The block playground refers to the standards that the UK must adhere to in order to export to the Alliance.

The UK left the EU in January, but agreed to abide by EU trade rules until the end of this year, so both sides can come to a new trade agreement. However, negotiations have been dragging on for months, and there are growing concerns that by the end of this year the talks could accidentally fall apart without a deal.

In this scenario, exporters on both sides will face higher costs and barriers in their daily business.

– Sylvia Amaro of CNBC contributed to this report.

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