Ranko Berich, Head of Market Analysis at Monex Europe, said sterling s reaction to today s trade deal was uninspiring .
He said: The uninspiring sterling reaction to today’s confirmation of a trade deal is looking like a classic case of buy the rumour, sell the fact . After weeks, months, and years of back-and-forth, it seems the confirmation of the deal was mostly as expected by markets and as such is not a game changer for sterling. Other factors, most importantly Covid-19, will now once again begin to drive the outlook for the pound. The details of the deal will be digested by markets over the coming weeks, after traders have finished digesting Christmas lunch.
| UPDATED: 10:33, Wed, Dec 23, 2020
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The pound to euro exchange rate sunk on Tuesday after the EU refused to accept the latest UK offer on access to its fishing waters, in the latest Brexit news. Concurrently GBP was negatively impacted amid the travel chaos as multiple countries across the globe moved to ban UK flights due to a new strain of covid identified in the UK. The pound is currently trading at 1.1021 against the euro, according to Bloomberg at the time of writing.
George Vessey UK Currency Strategist for Western Union Business Solutions, commented: “The new COVID-19 variant, discovered in Britain continues to rattle markets, yet early Monday s panic mode seems to have calmed for now. The UK and France are likely to reopen freight movement between them after the Paris decision to close the border caused major disruptions. The UK reportedly makes concessions on fisheries, hopes for a Brexit breakthrough keep the pound afloat.”
“The UK has reportedly made a considerable concession on fisheries, dropping its demand for an EU reduction of catches in UK waters from 60 percent to 35 percent, still apart from the bloc s demand of 25 percent. The differences are minuscule in economic terms but politically sensitive. European fishery lobbyists feared that Chief EU Negotiator Michel Barnier is ceding too much ground.”
What s more, multiple countries have now banned flights from the UK amid fears concerning a new strain of the virus identified, adding to travel chaos.
Boris Johnson will hold an emergency meeting later today after countries made the decision to shut their borders to Britain following the emergence of a super-infectious strain of COVID-19.
The pound is currently trading at 1.10942 against the euro, according to Bloomberg at the time of writing.
George Vessey UK Currency Strategist for Western Union Business Solutions, commented: “This morning market sentiment has soured and safe haven assets rise as a new strain of coronavirus discovered in the UK has triggered flight bans and heightened concerns. Several countries cancelled flights to Britain and the port of Dover has halted traffic to France, which could lead to serious supply-chain issues ahead of Christmas. Prime Minister Boris Johnson convenes the Cobra cabinet today. GBP/USD is down by more than 1 percent, punished also by
THE POUND lost some ground against the euro yesterday as post-Brexit trade negotiations continued and a new deadline was set for Sunday. All eyes remain on trade talks as the end of the year deadline approaches.