After Johnson’s dinner with EU Commission President Ursula von der Leyen last night a number 10 spokesperson has confirmed that both sides “agreed that by Sunday a firm decision should be taken about the future of the talks”. Von der Leyen has said that the two sides still remain “far apart” from each other on an agreement, while Dominic Raab has stated that it is “unlikely” that negotiations will be extended beyond Sunday.
As the Pound continues to be dictated by Brexit developments, the lack of a breakthrough last night has weakened Sterling. GBPUSD opened Wednesday at 1.3416 and held relatively steady until the afternoon when it started to experience heavy downside pressures. The pair finally closed off the day at 1.3389 and has continued to decline overnight – trading this morning just above the 1.33 mark.
GBPEUR also experienced considerable volatility in yesterday’s session. The pair opened at 1.1061 and was able to reclaim its status in the 1.11’s by the early afternoon. This spike was short-lived however, as the pair closed the day at 1.1083 and continued to depreciate throughout the evening.
It was a tough day for EURUSD also – the pair opened the day at 1.2129 and closed at 1.2080.
Following Johnson and von der Leyen’s unsuccessful dinner in Brussels last night, both negotiation teams are to engage in “further discussions over the next few days”. It would appear that the three main issues preventing a deal are still fishing rights, governance and competition – and unless either side are willing to ease their position on these issues, it’s plausible to argue that a deal will not be agreed.
When asked in a Sky News interview if a deal still could be agreed, Raab said “of course” but “it depends if the EU moves. The Foreign Secretary went on to add that “if the EU moves substantially and actually we're only dotting a few Is or crossing a few Ts, it might be different… but I think without movement on the crucial two, three areas that I've described, I think that will be a point of finality… and that's certainly the way the UK side is approaching it”
