A lack of progress on Brexit trade talks has put a halt to Sterling’s recent rally. Both Boris Johnson and the EU have commented on how negotiations have proceeded in the last 24 hours – noting that “big differences” still remain and securing a trade deal at this late stage is proving to be “very difficult”. It has been reported that the EU Parliament has set a Sunday deadline for talks if a deal is to be ratified by the end of the year. Speaking to the European Parliament today, EU chief negotiator Michel Barnier stressed that while there is still a “chance” of a deal, the “path is very narrow”.
Thursday was yet another positive day for GBPUSD as the pair was able to finish above 1.36. After a volatile week cable started Thursday trading strong at 1.3578 and was able to break through into the 1.36 range before midday. Following a choppy afternoon, the pair was able to finally close at 1.3608, but was unable to sustain that position as it took a sharp fall just before 20:00. The pair has continued to depreciate and currently trades around the 1.3520 mark.
Having found comfort in the 1.22 range, EURUSD traded steadily on Thursday – opening at 1.2238 and closing at 1.2257.
Similarly to cable, GBPEUR also had a volatile session. The pair opened Thursday at 1.1092 and quickly advanced to beyond 1.11. The pair closed at 1.1102, but fell out of this range and spent the night in the 1.10’s – where it continues to trade this morning.
After another “taking stock” call between Johnson and von der Leyen last night, the PM issued an official statement highlighting the content of the call. The statement says that “the Prime Minister underlined that the negotiations were now in a serious situation. Time was very short and it now looked very likely that agreement would not be reached unless the EU position changed substantially”. It goes on to add that the UK are “making every effort to accommodate reasonable EU requests on the level playing field, but even though the gap had narrowed some fundamental areas remained difficult”. On the issue of fisheries, Johnson asserts that “the UK could not accept a situation where it was the only sovereign country in the world not to be able to control access to its own waters for an extended period and to be faced with fisheries quotas which hugely disadvantaged its own industry”. The statement was concluded with the PM reiterating that “little time is left” and that “if no agreement could be reached, the UK and the EU would part as friends, with the UK trading with the EU on Australian-style terms.”