The United Kingdom is said to plan a compromise on the Irish border issue to a get a Brexit deal. Britain will reportedly accept some checks in the Irish sea to achieve an agreement. It could provide the necessary breakthrough, or at least a significant step further towards an accord ahead of the EU Summit later this month.
The new stance, if confirmed, is a departure from the previous position that stressed that Northern Ireland could not have different rules than the rest of the UK.
The GBP/USD jumped from around 1.315 to a high of 1.3115 before calming down. Resistance is seen at 1.3195 followed by 1.3220. 1.3100 remains a battle line. Support is at 1.3055 and the round level of 1.3000.
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The news comes amid the Conservative Party Conference. Prime Minister Theresa May is fighting for her political survival as pro-Brexit members want a tougher stance in the negotiations with the European Union. Her former Foreign minister Boris Johnson sharply criticized her Brexit deal. An offer to have separate rules for NI and the rest of the UK could cause a crisis with the Northern Irish DUP party on which the government depends.
The issue of Northern Ireland and the Customs Union has long been a sticking point in the negotiations ahead of Brexit date: March 29th, 2019.
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