European session review: GBP depreciates further ahead of the publication of UK internal market bill

GBP continued to depreciate against its major counterparts in the European session on Wednesday, as investors were awaiting the introduction of the internal market bill by the UK government later today. It is expected that the new legislation, which sets out trading arrangements across the UK after the Brexit transition period, which ends on December 31, 2020, might derail the country’s trade talks with the European Union (EU) as it is feared that it will override key parts of the Brexit Withdrawal Agreement, particularly the Northern Ireland protocol.

Reports about the introduction of the new bill caused friction between the UK and the EU. The EU warned of a no-trade deal if the UK tried to alter the Brexit deal. Meanwhile, the UK’s Northern Ireland minister Brandon Lewis said yesterday that the new bill would “break international law in a very specific and limited way”. Germany’s economy minister Altmaier stressed today that the Brexit agreement can be reached mostly on the goodwill of both sides. He also added that Brexit negotiations should not be burdened by the agreements being unilaterally changed by the UK’s government. 

In addition, investors had to contend with the reports that AstraZeneca/Oxford COVID-19 vaccine candidate trial had been put on, following a suspected serious adverse reaction in a trial participant in the UK.