Trade Negotiations

The British Pound started the new week higher amidst reports UK Prime Minister Boris Johnson was set to make a political intervention in Brexit trade negotiations with a view to achieving a deal by early next week, while foreign exchange markets were in a 'risk on' mood following vaccine news from AstraZeneca/Oxford University.

The EU's trade negotiation team has updated European politicians this morning, and confirmed there remains work to be done if a post-Brexit trade deal is to be agreed before year-end.

The UK and EU could sign a post-Brexit trade deal as early as next week, according to reports. However, contradictory briefings suggest negotiations can really run down to the wire and that the real deadline envisaged by the EU is December 31.

The British Pound starts the new week in distinctly mixed fashion by edging lower against the Euro and higher against the U.S. Dollar and a number of other major currencies.

Pound Sterling has reversed some of its earlier gains on headlines out midweek that the EU and UK likely to miss next week's deadline, but analysts say such a delay is unlikely to materially dent the currency's outlook.

A combination of rallying global stock markets and news that the UK might shift its position on the matter of fishing rights in ongoing EU-UK trade negotiations have conspired to push the Pound higher against the Euro and Dollar.

The British Pound remains a buy against the Euro with foreign exchange strategists at Wall Street bank Goldman Sachs, who remain optimistic that a deal will be struck between the EU and UK on a future trade deal.

It has emerged that the EU's Chief Negotiator Michel Barnier has given a downbeat assessment on the prospect of a post-Brexit trade deal being reached by the EU and UK, a development that will likely keep Pound exchange rates on edge over coming days.

The European Commission has released its latest economic forecasts for the EU, Euro Area and the UK, with projections built on an assumption the EU and UK will fail to strike a post-Brexit trade deal before year-end.

The British Pound has outshone the Euro and a host of other major currencies on news of progress in post-Brexit trade negotiations.

"We continue to see a path for a sharply higher GBP/USD cross into year-end—if several risk events cut in the right direction" - Goldman Sachs.

It is reported Friday that France is preparing to give ground on the matter of one of the main outstanding issues preventing negotiators from striking a post-Brexit trade deal: fishing.

The British Pound recorded its strongest daily gain against the U.S. Dollar, Euro and other major peers since March amidst an upsurge in optimism that the EU and UK were headed towards a post-Brexit trade deal.

The British Pound advanced in mid-week trade in the wake of a fresh overture from the EU's Chief Negotiator Michel Barnier, which have raised the prospect of talks restarting and a deal being agreed over coming weeks.

The door to further gains in the British Pound were opened by developments at the start of the week that saw the EU and UK effectively commit to an intensification of Brexit trade negotiations, erasing fears that the UK would walk away from talks.

UK and EU trade talks look set to continue after the EU made a notable overture to the UK on Monday, in an effort to intensify negotiations.

The British Pound experienced turbulence ahead of the weekend after UK Prime Minister Boris Johnson responded to an ongoing impasse with the EU in efforts to secure a free trade deal.

British Pound volatility extended into a key meeting of EU leaders on Thursday where ongoing Brexit trade negotiations would be discussed, with the +1.0% gains recorded against the Euro and Dollar at one stage on Wednesday giving way to losses.

The Pound is likely to remain highly reactive to headlines concerning negotiations over the near-term, but it is not expected to enter a more protracted directional move until there is clearer guidance as to whether  a deal is likely or not.

The British Pound started the new week on the front foot against the Euro, Dollar and other major currencies amidst an improvement in sentiment towards the UK currency based on a view a Brexit trade deal was on course to be delivered, however nerves are expected to remain elevated ahead of a crunch meeting of EU leaders on Thursday and Friday.