British Pound Latest: Sterling (GBP) Price Rally as The UK Leaves The EU
Brexit, Sterling (GBP) Price, Chart and Analysis:
- UK PM Johnson hails’ the dawn of a new era’ as the UK and EU finally split.
- Sterling positive with resistance levels being broken across a range of currencies.
Brexit Departure is Just the First Step as UK-EU Trade Talks Near.
The UK will finally the EU at 23:00 GMT tonight after 47 years membership of the European Union. The UK will then enter into a transition period with the EU until December 31, 2020 – where most EU laws will remain – with both sides looking to draw up a comprehensive trade agreement. UK PM Boris Johnson says that this will be the ‘dawn of a new era’, while European Commission President Ursula von der Leyen said, ‘It is the story of old friends and new beginnings now’.
UK-EU Trade Talk Timeline
January 31 – Brexit Day, the deadline for the UK to leave the EU. The Brexit deal will also need to be ratified by the European Parliament, although this is seen as a formality. Around the same date, the European Commission will ask member states for a negotiating mandate and what areas this mandate should cover.
February 25 – EU member states are expected to approve the negotiating mandate, enabling talks to start at the beginning of March.
March 9-12 – European Parliament Plenary Session where trade ministers are expected to be an update on trade discussions.
March 26-27 – EU Summit meeting.
June 18-19 – EU Summit meeting.
June 30 – Transition Period Deadline. The final date that the UK can ask for an extension of the transition period. The maximum extension available is two year.
November 23-26 – EU Parliament Plenary session at which a trade deal must be presented to the EU Parliament to be signed off.
December 31 - Brexit implementation period ends.
Sterling (GBP) Pushing Higher Post-BOE Meeting
The British Pound is pushing further ahead in early trade with GBPUSD touching a one-week high around 1.3135. Yesterday before the BOE meeting, GBPUSD fell as low as 1.2980 before edging higher into the rate decision. Sterling has made healthy gains across the board, especially against the Australian dollar. GBP/AUD has broken above the 1.95235 high made on December 16 and is back at levels last seen in June 2016. The recent series of higher lows continues, and a close above 1.95235 should see bullish momentum continue in the short- to medium-term.
GBP/AUD Daily Price Chart (MAY 2019 – Jan 31, 2020)
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GBP/USD Pushing Higher, Eyes 1.3177
The relief rally in Sterling continues after UK interest rates were left untouched. GBPUSD is making its way towards the recent 1.3177 high made last Friday and may find this level difficult to overcome in the near-term. While the boost from the BOE was welcomed by Sterling bulls, UK-EU trade talks will begin in earnest over the next couple of weeks and these are unlikely to give Sterling much of a positive boost to start. The chart does point to ongoing positive momentum and a close above the recent high should open the way to the December 31 swing high at 1.32845. Downside moves remain limited and should be underpinned around 1.2950 to 1.2970.
GBP/USD Daily Price Chart (May 2019 – January 31, 2020)
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