After a disappointing performance last week, Sterling is up this morning following the news that Brexit trade negotiations will continue. In a joint statement given on Sunday, EU Commission President Ursula von der Leyen and Boris Johnson announced that they are willing to “go the extra mile” to secure a trade deal between the UK and EU. Von der Leyen said that “despite the exhaustion after almost a year of negotiations, despite the fact that deadlines have been missed over and over, we think it is responsible at this point” to continue trade negotiations.
Friday was another tough day for the Pound – seeing GBPEUR fall as low as 1.0834. The pair started the session shaky at 1.0915 as no deal anxieties persisted in the markets. As concern increased, the rate continued to depreciate, finally closing the day at 1.0894. But after Sunday’s announcement, GBPEUR has recovered substantially this morning and is trading above the 1.10 mark.
GBPUSD also struggled on Friday. The pair opened the day at 1.3229 and quickly fell victim to downside pressures – ending the day finally at 1.3195. Despite cables poor performance last week, following the ‘positive’ Brexit news the pair has managed to secure itself well above 1.3350, testing the 1.3400 handle.
EURUSD in contrast had a rather quiet session on Friday. Opening at 1.2120, the pair traded in a tight range and closed the day off just below where it started, at 1.2111.
Following the excitement after yesterday’s announcement, Johnson was quick to assert there is still a strong chance of a no deal outcome. The PM noted that while both sides are “going to keep talking to see what” they can do, they “remain very far apart” on several key issues. He also reiterated Britain’s willingness to get a deal across the line, claiming that “the UK certainly won’t be walking away from the talks… I think the UK should continue to try, and I think that is what the people of this country would want me to do”.
Despite another deadline not being set, von der Leyen said that both the UK and EU have “accordingly mandated our negotiators to continue the talks and to see if an agreement could be reached, even at this late stage”.