The Pound is trading anxiously as Brexit worries are dictating the currency's performance against its peers. It has been reported that senior EU officials and diplomats have said that several countries – including France, Netherlands and Spain – are worried that the EU’s chief negotiator, Michel Barnier, may be too eager to conclude a deal with the UK, and that EU heads of state will have to step in to stop an agreement that is worse for the EU than a no-deal scenario.
A senior EU diplomat has noted that while “there’s full trust in Barnier but sometimes I think that a deal would be a kind of life achievement for him, and he could have temptations to compromise not in line with the feelings in some capitals”. They went on to add that “it is very difficult to predict what will happen… if you remember [the UK] expressed several times deadlines, finally they didn't follow the deadlines that they expressed and we know exactly what are the fundamental difficulties and we know exactly what is the European red line: we are ready on the one hand to propose a trade agreement, zero-tariff, zero-quota, but of course with a level playing field."
With a no deal looking increasingly realistic, advocates for a deal worry as “member states are becoming more and more impatient… of course everybody prefers a deal… but if the prospects of a deal are too limited, then the Commission should urgently table the contingency proposals.” Uncertainty about when Barnier will brief EU ambassadors has only increased anxiety. "Capitals are getting too nervous that they don’t know what’s going on in the important last phase of the process… of course we trust the Commission, and they very well know all the red lines, but the pressure from capitals is increasing.”
Cable managed to sustain itself in the high 1.32 range yesterday and was even able to test the 1.33 handle. GBPUSD started the day off trading at 1.3288, and was able to surpass that mark at the close, finishing the session at 1.3297.
As for GBPEUR, the pair was able to move past the 1.12 mark yesterday, sustaining itself at that level beyond the close. The pair opened Wednesday at 1.1177 and finally closed at 1.1204.
The Euro also lost ground against the U.S. Dollar yesterday. EURUSD opened the session at 1.1887 and closed just below that mark at 1.1868.