The pound fell against its counterparts yesterday as the EU confronted UK negotiators and requested concessions in order to make progress towards securing a deal. The development caught the UK team off-guard because it was at this point that they were set to officially announce they would not be walking away from talks.
The pound was sold across the board throughout the day, with GBPUSD slipping back into the $1.28s. UK top negotiator, David Frost, expressed disappointment at the EU’s new position and confirmed that the Prime Minister would offer his response today. The development pushes the 2 sides further towards a potential bust-up at what is well and truly a critical point of the process. It’s likely GBP will have a volatile final day of the trading week with a flock of headlines expected to potentially filter across the wires throughout the day. Support levels to keep an eye on include GBPUSD 1.2850 and GBPEUR 1.10.
Elsewhere, eurozone inflation and US retail sales will be the key highlights on the data front as we conclude what has been a dramatic week of trade.
Have a good weekend and stay safe.
8:40am, October 16th 2020
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