Investing.com - The pound fell dropped sharply on Thursday as the fifth round of Brexit concluded in a deadlock.
At 12:06 GMT, GBP/USD dropped 0.69% to 1.3129, the previous session close saw cable at 1.3220.
The stalemate comes as 'significant progress' has not been made on the three main divorce subjects, namely: citizens’ rights, Irish border question and the exit bill. According to the EU, failure to have made progress in these three key areas means that the EU cannot begin discussing the future trade relationship between the UK and the bloc.
Michel Barnier, the EU’s chief negotiator stated in a press conference that he did not have the mandate to begin discussions on the future trade relationship between the UK and the EU, stating that the talks had reached an impasse on the issue of the Brexit divorce bill.
Investors will be looking toward the European Council October meeting. Britain’s Brexit negotiator David Davis said he hoped at this meeting Barnier would be given a new mandate by the EU 27 to discuss the future trade relationship so that talks can move forward. As it stands. it looks like the three main issues may not be resolved until the next Brexit summit, in December.
British banks look to be heeding the Bank of England’s warning on unsecured lending. A recent survey released on Thursday showed that unsecured credit increased in the third quarter, however it also detailed that lenders are expected to tighten conditions for consumers in the coming months.
The US dollar fell to a 2-week low following the release of minutes from the Federal Reserve’s September meeting. While a December rate rise still looks likely, concerns were raised about weaker inflation.
The US dollar index, which measures the greenback against a trade-weighted basket of six major currencies, was up 0.13% at 92.91.
Following the press conference between David Davis and Michel Barnier, EUR/GBP soared 0.66% to 0.9030, while EUR/USD was flat at 1.1856.
GBP/JPY was down 0.89% to 147.39. GBP/CHF was 1.2792, a drop of 0.60%.
Sterling sank more than 1% against the commodity currencies. GBP/AUD was down 1.03% to 1.6802, while GBP/NZD dropped 1.15% to 1.8464.
GBP/CAD dipped 0.61% to sit at 1.6370.
Investors will be looking toward the release of US CPI on Friday.