Euro and the GBP Turn Bearish After EU Turns Down Johnson’s Plan
Skerdian Meta • 1 min read
Yesterday we heard the UK PM spokesperson say that Boris Johnson has a plan for the Irish border issue, although he didn’t exactly explain what the plan was. We only heard that there won’t be checkposts 5 or 10 miles from the border, which would mean that the border has just been pushed a few miles back or forth, depending whether you are on the UK side or the Irish side of the border.
Markets didn’t buy much into that; they took it as a desperate move to satisfy both sides, the EU and the UK opposition, so the GBP lost around 100 pips. Now we hear the EU reject that plan, whatever it was. Here are some comments from the EU released a while ago:
- The only option for a Brexit deal before October 31 is return to Northern Ireland-only backstop, otherwise extension is likely
- If this is final UK Brexit plan, it won’t work. Would then move to discussing extension of deadline
- Not clear if UK PM Johnson is positioning himself for blame-game over failed negotiations
- Time limit to backstop is impossible under Brexit proposal, as reported by media: Merkel and Macron would not bully Varadkar into it.
- UK Brexit proposal, as reported by media, would effectively erect Irish border
So, the EU is not buying into the alleged plan either. Boris Johnson is due to speak soon in Brussels where he will unfold his Brexit plan. But, judging from the comments, the EU will likely reject his plan once again, so the Euro and the GBP have turned bearish. There is a slight chance that the EU might find the deal attractive, which would send both currencies surging, but those chances are slim.