Breaking News: GBP/USD falls sharply on reports May to reject Barnier's Irish offer

Yohay Elam FXStreet

According to the Times, UK Prime Minister Theresa May is set to reject the improved offer by Chief EU Negotiator Michel Barnier for a solution on the Irish border. Maintaining an open border between the Republic of Ireland and Northern Ireland has been one of the thorniest issues in the Brexit negotiations.

Update: a British government source welcomes the efforts by the EU but states that the UK cannot accept that Northern Ireland will be separated off the UK Customs Territory.

The GBP/USD dropped to a low of 1.3098 from the highs close to 1.3200. Support is seen at 1.3080 and 1.3045. Resistance is at 1.3170. The pair stabilized after the initial drop.

Britain does not want a special status for Northern Ireland outside the UK or a border on the Irish Sea. May's ruling Conservative Party relies on the support of the Northern Irish DUP. The Conservative Party holds its annual conference from September 30th to October 3rd.

The report from the times comes a short time before European leaders including May convene for an unofficial summit in Salzburg, Austria, with Brexit being high on the agenda.

GBP USD falling on May reportedly rejecting Barnier's Irish offer

Earlier, the GBP/USD jumped to new highs on higher than expected inflation numbers. UK inflation advanced by 2.7% YoY, above 2.4% expected and raised expectations for a faster pace of rate hikes by the Bank of England. Concerns about the new US tariffs on China have been in play earlier as well.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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