The pound endured another bumpy ride yesterday as traders and dealers weighed up the short-term prospects for the ongoing Brexit game. The market is reflecting pessimism over a potential deal but it’s clear there is still some small form of hope a solution can be found this week.
The UK provided an olive branch to the EU yesterday by agreeing in principle on all outstanding Withdrawal Agreement issues. Between Michael Gove and EU Commission VP Sefcovic, a positive outcome was found in which the UK’s Internal Market Bill ceases to conflict with the WA anymore.
This positive development should boost sentiment heading into the all-important face to face dinner between PM Johnson and EU President Ursula von der Leyen tonight in Brussels. This will be one of the final attempts to come to some form of compromise on the outstanding issues.
Elsewhere the Bank of Canada will conduct a monetary policy announcement this afternoon. No changes are expected with the central bank forecast to maintain interest rates at 0.25%.
9:07am, December 9th 2020
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