Given that it was President Macron’s protests at the EU Summit in October that pushed back Boris Johnson's October 15th deadline, it comes to no surprise that France have declared an ultimatum to the UK at this crucial point of negotiations. Reports suggest that French officials want the EU to conclude talks as failed unless the UK accepts the EUs demands within 48 hours.
The week continues to get worse for GBPEUR, with the pair falling to its lowest levels since October as no deal fears plague the market. Opening on Wednesday the pair started the day at 1.1088, but quickly came under pressure and soon reached as low as 1.1008. After this decline the pair showed resilience and clawed back some of the losses it had made by the close, finishing the day at 1.1038. As we edge closer to the finale of negotiations, there is no doubt that we can expect much more volatility from GBPEUR.
In contrast to GBPEUR, cable has been able to sustain somewhat of a tight range over the last few days, maintaining its status above the 1.33 mark. GBPUSD opened yesterday at 1.3363 and closed below that level at 1.3349. It is important to note that just before 07:00 GMT today the pair was able to breach the 1.34 handle and continues to flutter between 1.3390 and 1.3412.
While Michel Barnier is saying that negotiation “talks stand in the balance”, Macron has been reiterating his message that he will not sign up to any deal that hinders France’s long-term interests. The Times have reported this morning that "France and other hardline countries are pushing for no deal in Brexit talks to soften up Britain before a reset in negotiations next year, unless the government makes significant concessions in the coming days,". The report goes on to add that unless the UK “backs down over the next 48 hours”, the EU should put an end to talks and allow the economic pain of short no-deal period to “bring a chastened Britain to the table next year”.
EURUSD has continued its recent impressive form as it surpassed the 1.21 mark after yesterdays close. The pair open the day at 1.2051 and pressed on through the session, finishing Wednesday off at 1.2092.