Wednesday, March 29, 2023

Pound Remans Above Lows Despite U.K. Declaring Brexit Talks ‘Over’ By


© Reuters.

By Yasin Ebrahim – The pound remained off session lows against the dollar Friday, shrugging over a further souring of trade talks between the U.K. and EU after Prime Minister Boris Johnson’s spokesman said talks were “over” unless there was a fundamental change from the economic bloc.

rose 0.06% to $1.2920, above its session low of $1.2866.

“There is only any point in Michel Barnier coming to London next week if he’s prepared to address all the issues on the basis of a legal text in an accelerated way, without the UK required to make all the moves or to discuss the practicalities of travel and haulage,” the official spokesman for the prime minister said, according to media reports.

Just a day earlier, EU leaders dropped their commitment to work “intensively” with the U.K. to reach a trade deal and said Britain would need to “make the necessary moves” to secure an agreement.

Level playing field commitments, fisheries, and issues of governance continue to be key sticking points holding up progress on trade talks.

Negotiators on both sides have confirmed, however, they will be in touch via telephone next week.

The lack of progress on a deal and the surge in Covid-19 infections have some on Wall Street earmarking bets against the GBP/USD against a favorable trade next week.

“We are recommending a short tactical GBP/USD trade idea to reflect higher Brexit risks in the week ahead after the EU leaders summit failed to make progress on a trade deal,” MUFG notes. “The outlook for the UK economy is darkening heading into year end which could encourage the BoE to deliver more stimulus next month,” it added.

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