The British pound lost some of last week’s impressive gains on Monday as the markets embrace a crucial week for Brexit.
The pound dropped to 1.2574 against the U.S. dollar, down by 0.59 per cent, in early afternoon.
It was trading at 1.1403 against the euro, down by 0.51 per cent.
Analysts believed the pound’s softening has to do with the complicated Brexit negotiations that have yet to produce a result.
The pound’s decline on Monday came as Queen Elizabeth II delivered a speech setting out the government’s agenda at the State Opening of Parliament.
“My government intends to work towards a new partnership with the European Union (EU), based on free trade and friendly cooperation,” the Queen said.
The traditional Queen’s Speech by the monarch, outlining the Conservative government’s proposals, came under attack from opposition politicians who described it as an election manifesto.
The Queen opened her speech by saying the government’s priority has always been to secure the UK’s departure from the European Union on Oct. 31.
The Queen said the government wants a new partnership with the European Union, based on free trade and friendly cooperation.
She said EU citizens living in Britain will be able to stay in the country. An immigration bill, ending free movement, will also be introduced for a fair and modern system, the monarch added.
The Queen listed over 20 bills, a third of them allowing Britain to seize the opportunities that Brexit will present once Britain has left the bloc. New bills will cover a range of issues from crime and punishment, climate issues and care for the elderly.
She added that as Britain leaves the EU, it will continue to play a leading role in global affairs, and defense spending of 2 percent of the country’s GDP will be maintained.
Although the monarch delivers the speech, it is written by the government.
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As the traditional centuries old ceremony took place, Brexit Secretary Stephen Barclay was in Brussels negotiating with European Union officials in the hope of finding a deal to enable Britain to leave the bloc at the end of this month.
Later Monday, politicians in both the House of Commons and the House of Lords start the task of debating the contents of the speech, with a vote taking place at the end of this week by MPs.
Opposition MPs have already threatened to defeat the speech’s contents when the vote takes place.
The speech came in what has been described as a crucial week in British politics which will conclude with the first Saturday sitting of the House of Commons in more than 40 years.
Later this week, Prime Minister Boris Johnson heads to Brussels for a two-day meeting of the EU Council.
He will learn at that meeting whether a potential Brexit deal has been agreed to put before British MPs at the Saturday sitting.
Britain and the EU are rushing against the clock to lock down a Brexit deal ahead of the coming key EU summit.
With Britain scheduled to exit the EU on Oct. 31, the European leaders’ summit starting on Thursday is seen as the last chance to agree any deal before that deadline.
The pound climbed above 1.26 last week, a high that has not been seen for the past two months, boosted by optimism that Britain and the EU could strike a deal before the Brexit deadline.