UK and EU agree on historic Brexit text

Joseph Trevisani FXStreet

The European Union and the United Kingdom have agreed on a provisional text for the withdrawal treaty ending Britain’s membership in the continental organization.

Prime Minister Theresa May will present the terms to her cabinet on Wednesday reported the Financial Times, after months of arduous and difficult negotiations. The last issue in Brussels was the border between the EU and the UK in Northern Ireland.

Ms May now must obtain approval of her cabinet. Several Eurosceptic ministers have voiced serious doubts about the legal makeup of a proposed customs union that will avoid a hard border between Ireland and Northern Ireland. Further discussion might be needed if objections are raised in London or from individual EU countries, though any stumbling blocks are likely to be within the Conservative party. The agreement may permit an EU summit in November to complete the Union’s endorsement.

Sterling has rallied sharply on the news. The pound is trading at 1.3007 at the time of this writing, a figure and a half higher than Monday’s close at 1.2853. The EUR/GBP is at 0.8670, 70 points below yesterday’s close at 0.8740. The EUR/USD has gained a modest bid, moving to 1.1276 after Monday’s close at 1.2337.

Author

Joseph Trevisani

FXStreet

Joseph Trevisani began his thirty-year career in the financial markets at Credit Suisse in New York and Singapore where he worked for 12 years as an interbank currency trader and trading desk manager.

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