Brexit Deal-No-Deal Comments Keep the GBP/USD Volatile
Like all other risk currencies, which have been quite bullish in November, the GBP/USD has also been bullish during this month, but the uptrend hasn’t been too straightforward. We have seen some see-saw price action during this time. We saw a decline earlier today and a reversal back up, while now the price is falling again, as Irish officials have made contradicting comments on the Brexit deal.
Comments by Irish foreign minister, Simon Coveney
- A Brexit deal can be finalized this week
- There needs to be give and take on both sides
- This is the key week, we are running out of time
- Has faith that Barnier can negotiate a balanced deal
The narrative at the end of last week was that getting to a deal is “tough” and that there are still “significant gaps” on the three key outstanding issues. But so far, both sides are now communicating better odds of achieving something.
I could be reading too much into the political theatre/play-acting, but just be mindful of earlier reports from last week suggesting that they could work out some technicality to get something across the finish line – for now at least.
Further comments by Coveney
- If there is no agreement on fisheries, the whole thing could fall into the water
- Fisheries is a more difficult issue than the level playing field
- UK attempting to separate fisheries from other issues
- We are not going to play that game
Nothing new really from Coveney, but the pound has seen a slight decline over the last 15-20 minutes, as cable pares its gains for the day upon testing its 100-hour moving average just above 1.3350 earlier. The price is now slipping just under the 200-hour moving average of 1.3320, but we still see some added support closer to 1.3290-00 next.
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