Brexit Uncertainty Continues, but GBP/USD Doesn’t Quaver
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- Optimism for GBP/USD
- Brexit Negotiations Continue- What’s Next?
- Lockdown 2.0
GBP/USD Trades to the Upside
As we sit in wait for a possible outcome from the ongoing Brexit saga, GBP/USD trades to the upside. With limited days on the calendar, the UK has a few moves left before it’s too late to strike a deal. The GBP/USD is now trading at 1.3260 with an intraday high of 1.3264 and a low of 1.3193. With 3 consecutive days of gains, the pair is showing some optimistic notes as the UK approaches the deadline to reach an agreement.
On March 19th we saw the pair plummet to 1.1409. Nevertheless, in the medium to long term, the GBP/USD exchange rate has been favored by traders and investors since these lows.
Since March lows, GBP/USD has made a gradual recovery of 16.30% to the current market price. Witnessing a high of 1.3482 on Sep 1. This week has seen the pair move to the upside and market sentiment uplifted in an attempt to restore last week’s levels north of 1.3300.
Deal or no Deal
A trade deal is still not secured as red lines remain unchanged. This became clearer on Sunday as Chief UK negotiator David Frost made remarks on working to reach a deal, as the last week of negotiations are now in full swing. Both sides appear determined that their demands will remain unchanged. The key difference showing that the EU does not necessarily need this deal. While a post-Brexit trade deal is vital to the UK’s future. The compelling reasons for compromise on the UK’s side include job losses, trade tariffs and overall business uncertainty.
On Sunday, Lord Frost, keeping the tough tone, tweeted he will not be changing his course of no compromise in the process of working towards a deal. The Chief UK negotiator stated they are willing to sign a deal only if it guarantees the UK takes back control of their laws, trade, and waters. He added, “That has been our consistent position from the start and I will not be changing it.”
On Monday Michel Barnier EU chief negotiator, also took to Twitter. He stated that the EU team continues the negotiation process this week in Brussels as they remain “determined, patient, respectful” and want the future cooperation to be “open but fair in all areas”. The key differences in the positions of both sides remain on the fishing rights of EU countries in UK waters.
In the midst of the crunch moments of negotiations, Prime Minister Boris Johnson was forced to self-isolate. This came to light following a meeting with Conservative MP over the weekend who was later diagnosed with the coronavirus. PM Johnson has stated, however, that he will continue working and speaking to the nation.
Starting Nov 1, the UK has been under the second round of restrictions. This is yielding questionable results. Covid-19 daily cases continue to hover above 20,000 with a peak of 33,470 on Nov 12. The strict measures are to remain in place until Dec 2, but they may be extended for longer if the review shows a high number of newly confirmed cases on a continued daily basis.
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