There’s been a sharp drop in the pound in recent trade as comments from Donald Tusk hit the wires, with the European Council president commenting on the latest Brexit developments. The swoon lower came as traders and algos rushed to sell sterling on the line that the UK has not come forward with a “realistic and workable proposal” sending the GBP/USD rate down by a cent (around 1%) in less than a minute. It appears that this was something of a false move as additional comments were actually far more constructive than has been the norm of late from Tusk but it just goes to show the heightened sensitivity in the markets to any Brexit headlines at present.
Thursday was the best day for the pound in 7 months with the currency soaring across the board after the Boris-Leo statement that they "see a pathway to a possible deal". This could well be a pivotal turning point in negotiations but we still need greater clarity on details as well as support from elsewhere. The meeting of Barclay and Barnier could provide more insight with these two possibly less conducive to concessions than the UK and Irish leaders.
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