Brexit talks fail to reach breakthrough amid day of volatility
|The pound has seen a day of volatility, with the pound ultimately rising despite lack of final deal. Meanwhile, US-China relations have been dented by a US bill aimed at supporting the push to retain Hong Kong independence.
- Market indecision reigns amid uncertainty over Brexit and US-China talks
- Immediate deal looking unlikely, yet GBP rise highlights improved outlook for a deal
- US-China relations sour as House passes Hong Kong bill
Markets have been largely devoid of any directional bias over the course of today’s session, with traders unable to truly say with confidence whether we are on the cusp of a Brexit or US-China breakthrough. Today’s newswires have been dominated by contradictory rumours on the direction of Brexit talks, with the clock running out ahead of the European Council summit. Brexit talks have certainly ramped up in anticipation of this summit, yet despite apparent progress it seems that time has run out for a deal to be agreed and drawn up ahead of tomorrows summit. However, despite the lack of clarity on exactly how Johnson plans to get a deal across the line, there is a growing confidence that Johnson wants a deal despite previous fears that a no-deal Brexit is his primary aim. In a week that has seen GBPUSD hit the highest level in five-months, it is evident that traders are more confident than ever that a no-deal Brexit is going to be avoided.
Sentiment around US-China trade talks have taken a hit today, as the Chinese responded with anger over the passage of a House of Representatives’ bill which could lead to sanctions on individuals who undermine Hong Kong’s autonomy. Coming at a particularly sensitive time for US-China relations, the perceived interference in Chinese affairs does little to raise hopes of a trade deal between the two sides.
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