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Market Update

• Posted by currencies in Brexit, coronavirus, No Deal, Sterling, UK, Uncategorised
• December 1, 2020
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The pound was close to $1.34 for the first time in three months, and also edged up versus the euro, as market participants remained optimistic that a Brexit deal could be reached this week, despite a lack of tangible progress in negotiations.

The UK left the European Union in January and is currently in a status quo transition period that will end on Dec. 31. Both sides are currently in trade talks to reach an agreement on the UK’s future relationship with the bloc.

Michael Gove, a senior British minister, said that the talks were still stuck on the issues of fishing, governance rules and dispute resolution because the EU is asking too much.

The Irish prime minister said that he was hopeful that a deal could be reached this week. But he had also expressed hope at the beginning of last week that the outline of a deal would be agreed within days.

The waiting game for GBP continues, but we can expect more days of contradicting headlines driving intraday movement in GBP.

Michael Gove, said that there was a chance that Brexit trade talks may end without a deal, the nightmare finale to the five-year Brexit crisis.

“We have intensified the negotiation process, but it’s important that the EU also lives up to its responsibilities as well,”

Asked whether a no deal was closer than anyone would admit, he said: “I think it’s certainly the case that there is a chance that we may not get a negotiated outcome, that’s why it’s important business prepares for all eventualities, but I very much want a deal and I believe that we can secure one.”