Sterling is holding steady as Boris Johnson prepares to fly to Brussels today to meet with Ursula von der Leyen in the hope that the two sides can come to an agreement on the issues that still persist in negotiation talks. The PM and European Council President will hold talks over dinner, where Johnson will work through a list of the major sticking points. It is important to note that (if) any progress is made this does not mean a deal is done, but rather will give officials more direction for future talks.
After a sharp fall at the beginning of the week due to Brexit anxieties, cable was able to close above the 1.3350 mark on Tuesday and is trading above the 1.34 handle this morning. GBPUSD opened at 1.3340 yesterday and despite experiencing downside pressure throughout the session was able to recover by the end of the day, closing off at 1.3355.
GBPEUR also managed to gain some upside yesterday. After making advances into the 1.10 range the pair opened the day at 1.1014 and was able to close above that mark, finishing Tuesday at 1.1028.
In what is being described as a “make-or-break” moment for Brexit negotiations, we can expect to see heightened volatility in the Pound as markets react to whatever news will come.
While some are still optimistic of a deal, Michel Barnier has condemned the chances as “very slim”. With the deadline approaching Barnier has implied the EU will not be will not take negotiations beyond 2020, noting that the EU “are very close to the moment of needing urgent measures which means a contingency plan for no deal”, stressing that “the basis of our future cooperation with the UK is more important than rushing now. We cannot sacrifice our long-term interests for short-term political goals”. Barnier is not alone here, the UK have also stressed that they “have been clear that the future relationship needs to be concluded by the end of the year and negotiations won’t continue in the new year” – claiming that has been their “position throughout”.
EURUSD is holding steady at the 1.21 handle. The pair opened the session yesterday at 1.2113 and closed just below that at 1.2110.
