GBP price, Brexit news and analysis:
- UK Prime Minister Boris Johnson is to amend the bill to withdraw the UK from the EU to ensure the transition period cannot be extended beyond the end of next year.
- That has further weakened GBP/USD after its surge following the result of the UK General Election.
GBP/USD slides on fears of a no-deal Brexit
UK Prime Minister Boris Johnson has said he will amend the Withdrawal Agreement Bill to rule out an extension of the post-Brexit transition period beyond the end of 2020, making a no-deal Brexit more likely and sending GBP/USD lower after its surge in the wake of his Conservative Party’s victory in last Thursday’s UK General Election.
GBP/USD Price Chart, One Hour Timeframe (December 12-17, 2019)
Chart by IG (You can click on it for a larger image)
At present, the Bill allows the Brexit transition period to be extended by mutual agreement for up to two years but Johnson’s amendment will rule that out even though the EU’s chief negotiator Michel Barnier is unconvinced a trade deal can be reached in a year.
Meanwhile, Johnson will ask Parliament to debate and vote on the withdrawal agreement on Friday, paving the way for Brexit by the end of next month. If the UK and the EU fail to reach an agreement by the end of next year, the UK will revert to World Trade Organization trade rules.
Technically, as the chart above shows, GBP/USD has now filled the gap left on the chart after the Conservative victory last Thursday, suggesting further downside could now be limited.
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--- Written by Martin Essex, Analyst and Editor
Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex
