British Pound (GBP) Latest - Talk of Brexit Compromise Boosts Sterling
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Brexit News and Sterling (GBP/USD) Price, Analysis and Chart:
- UK offer on fisheries closer to EU demands.
- UK Q3 GDP revised higher.
- Sterling firms on underlying bid.
The UK has offered the EU a compromise on fisheries in an effort to break the current Brexit impasse. The offer is said to be a 35% reduction in the catch value with a five-year phase in period and is much closer to the EU’s original demand of a 25% reduction and may help to break the current deadlock. As yet there is no movement from the EU over the new proposal but the market seems to believe that a move may, or counter-offer, maybe on the cards. Sterling has picked up from yesterday’s sub-1.3200 low and currently trades around 1.3440, while EURGBP is back below 0.9100 after trading around 0.9220 on Monday.
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UK GDP grew by a record 16% in Q3, up from a preliminary forecast of 15.5%, compared to a revised -18.8% in the prior quarter, according to figures released by the Office for National Statistics (ONS) earlier today. Compared to Q3 2019, UK GDP fell by a revised 8.6%. Public sector net borrowing for November was GBP31.6 billion, the third-highest total on record.
The latest Covid-19 statistics show a further 33,364 people tested positive on Monday, pushing the 7-day rate up by nearly 55%. The UK remains locked out of Europe due to the new mutations, with thousands of lorries stuck at UK ports. UK PM Boris Johnson is preparing to test all lorry drivers for the virus in an effort to get freight moving and talks with French President Emmanuel Macron over the situation will continue.
Sterling is becoming increasingly difficult to trade as holiday-thinned markets push volatility higher. On Monday cable traded in a three-point range, more than double its current ATR, and higher than the extreme volatility seen in late-March. It may be wiser to watch from the sidelines until some concrete Brexit news is announced.
GBP/USD Daily Price Chart (April - December 22, 2020)
Retail trader data show 39.93% of traders are net-long with the ratio of traders short to long at 1.50 to 1.Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed GBP/USD trading bias.
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What is your view on Sterling – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.
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