May 23, 2024

The pound is declining as concerns mount about the risks of not reaching an agreement

A truck passes through security at Larne Port in Coe Antrim, Northern Ireland, December 6, 2020.

Paul Iman | Agence France-Presse | Getty Images

London – Sterling pound It extended its losses against the US dollar on Monday, amid mounting concerns that UK and EU negotiators will fail to reach an agreement before the transition period ends later this month.

The British currency was trading at $ 1.3230 during the morning trade, down 1.5% during the session.

Talks between the United Kingdom and the European Union are due to resume later in the day, and British Prime Minister Boris Johnson is expected to speak to European Commission President Ursula von der Leyen.

Both sides are trying to settle the terms of a potential post-Brexit trade deal. The United Kingdom and the European Union indicated progress in some areas, but disagreements remained over fishing rights, so-called “equal opportunity”, and how to resolve future disputes.

Equal opportunity refers to the standards the United Kingdom must adhere to in order to export to the block.

The UK left the European Union in January but agreed to continue to follow European trade rules until the end of the year until the two sides can reach a new trade agreement. However, negotiations have dragged on for months, and as the end of the year approaches, there are growing concerns that the talks could collapse without an agreement.

In this scenario, exporters on both sides would face higher costs and barriers in their day to day business.

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CNBC’s Sylvia Amaro contributed to this report.