On Sunday, reports revealed that Prime Minister Boris Johnson’s government was working on the assumption that the European Union would not renegotiate the Brexit deal. This meant the government is speeding up preparations to leave the EU without a deal on October 31. Michael Gove has stated that the government is “working on the assumption” of a no-deal Brexit.
Writing in The Sunday Times, Mr Gove added that a “no-deal is now a very real prospect”.
Meanwhile, this week policymakers from the US Federal Reserve are expected to cut interest rates for the first time since the financial crisis more than ten years ago.
However, this could do little to stop Sterling slumping against the dollar at the start of the week.
On Sunday evening former Fed Chairman Janet Yellen stated she was in favour of an interest rate cut on Wednesday.
The former chairman said she supported a 25 basis point cut due to a weaker global economy and low US inflation.
Speaking at an Aspen Economic Strategy Group meeting in Colorado, Miss Yellen said: “The United States isn’t an island. We’re part of the global economy. What happens in the rest of the world – in Europe, in Asia – affects the United States. And it’s also true that US monetary policy affects conditions all around the globe.”
Looking ahead to this afternoon, the US dollar could slide against the pound following the release of the US Dallas Fed Manufacturing Activity.
If activity continues to slide in July it could dampen sentiment in the “Greenback”.