GBP to Rise if Brexit Negotiations Resolve Deadlock

Sterling is expected to strengthen in the coming days ahead of a crucial European Summit where an important milestone for Brexit negotiations is set to be reached.

“You’d get a big move into the pound, if there’s agreement to move to trade (negotiations),” Stephen Isaacs, chairman of the investment committee at Alvine Capital, told CNBC on Wednesday.

The pound hit a two-month high on Wednesday after media reports said that the U.K. government had increased its financial offer to the European Union – the so-called Brexit bill, which is what the U.K. could pay to fulfil its remaining obligations to the bloc before it leaves.

This increased the chances of a deal on the three main issues that have derailed the talks over the past months. Sterling was up 0.5 percent against the dollar, trading at $1.3405 at about 11:30 a.m. London time.

The EU and the British government haven’t yet confirmed these reports of a financial contribution somewhere between 50 billion and 100 billion euros. However, the European Union is set to update on the ongoing Brexit negotiations in the coming days.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza