After a brief uplift, the pound is weak this morning against both the euro and the dollar.
The pound surged yesterday due to Chancellor Merkel’s suggestion that the backstop can be renegotiated. Following on from her comments during a meeting with Boris Johnson on Wednesday, Merkel said that the UK could have time until the 31st of October deadline to find a solution to the Irish backstop. Sterling jumped to a three week high as a result.
Despite this, President Macron called the backstop ‘indispensable’ during a meeting with the Prime Minister in Paris. He didn’t take the hard-line approach that was expected, however. Macron warned that any withdrawal agreement reached in the next month wouldn’t be very different from the existing one. He also asked for more “visibility” of the UK’s alternative proposals. Macron also agreed with Merkel’s original pledge to give the UK 30 days to come up with a solution to the backstop.
