GBP Bulls Run Wild with Renewed Brexit Hopes from EU Sources

GBP has caught a decent wave of upside pressure as the UK and US players return from respective public holidays.

The bull action comes inline with some broad USD weakness that is observed, but there are also a couple of strong supporting fundamental factors that have provided a boost.

There were comments from EU sources which were being picked up across the news wires, seemingly improving the scope of Britain-EU talks. The sources detailed the European Union is willing to drop its current “maximalist” approach on fisheries (a current barrier between the two) in negotiations with Britain next week. It would be the first major concession from the EU in talks on their ties after Brexit.

Elsewhere, Bank of England’s Haldane was speaking, he said BoE has not reached remotely yet a view on negative rates; key issues to consider are consequences on the financial sector and confidence in the economy; still reviewing evidence on NIRP. The fact that they are not yet fully decided on this is somewhat a GBP positive.

What does this mean for GBP

The current risk appetite has sparked big flow and recovery for GBP. pushing back up to the highest levels in almost two weeks for GBP/USD. Given that the Brexit talks have been a fundamental laggard on the pound over the past few weeks, this does provide some near-term hope and support. Do note, the bulls could still lose ground on; the escalation of U.S. and Chinese tensions and lack of progress with the UK-EU talks next week.



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