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Market Update

• Posted by currencies in Bank of England, Bremain, Brexit, coronavirus, Sterling, UK, Uncategorised
• October 23, 2020
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Sterling edged up in trading this morning, set for a weekly gain against the dollar and euro, as Britain and the European Union entered intense negotiations to reach a last-minute Brexit trade deal.

The pound had its best day in seven months on Wednesday, surging 1.7% against the dollar, when Britain and the EU said they would enter a new phase of intense Brexit negotiations.

This came less than a week after Prime Minister Boris Johnson had said talks were cancelled – a move markets dismissed as brinkmanship.

Anything that brings a deal – any deal – closer to the table is going to see sterling strengthen. On the other hand, anything that highlights the risk of no-deal is going to see sterling weaken.

Britain left the EU in January and is currently in a status-quo transition period which ends on Dec. 31.

A Brexit trade deal is in both sides’ interests but can only happen if the EU respects British sovereignty over fisheries, UK junior finance minister Stephen Barclay said on Friday.

Fishing remains a key sticking point in the negotiations, despite the industry making up just 0.1% of UK GDP.

If a deal’s there to be done, we will see that in the tail end of November, maybe even very early December, with just enough time to get the legalities sorted out.

A further 21,242 coronavirus cases were reported in Britain on Thursday, down from a record 26,688 cases a day earlier, daily government statistics showed.

There were a further 189 deaths within 28 days of a positive test, down slightly from 191 the day before.