Why is the Pound falling? Pound plunges to 2 year low against Euro

Why is the Pound falling? – Sterling has taken a battering today, with the GBP/EUR rate dropping to €1.1020 at the time of writing. This is the lowest the Pound/Euro rate has been for nearly 2 years. the Pound has fallen around 1% just today:

Pound/Euro rate 29th July 2019

The Pound has also fallen against the US Dollar, falling to $1.2258 at the time of writing. This isn’t far away from the lowest it has been since 1983:

Pound/US Dollar rate 29th July 2019

Why is the Pound falling?

Brexit. Boris has signalled that he will only start talking to the EU if they agree to ditch the back stop from the withdrawal agreement. The government have also said that they will be working from the assumption that Brussels would not agree to any further negotiations. No Deal preparations are now in full swing, and the markets seem to be taking notice.

The EU have said the only deal available is the one already agreed by Theresa May. However, given that this has been rejected by the UK 3 times, and led to the resignation of the prime minister, it’s hard to see how they can expect the same deal to be re-heated and served again. The new administration has therefore taken its first shots in its negotiation, by stating they won’t even start talking until the contentious back stop is removed.

We now wait to see wh