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With a little over two weeks left until the UK leaves the EU’s single market and customs union, negotiations on a post-Brexit trade deal are continuing, even at this eleventh hour. The risk of a no-deal scenario is now very high but even if a deal is not struck in time, economists at ABN Amro expect one to be concluded in the course of 2021. 

Today, GBP/USD is trading off the highs seen on Monday. See – GBP/USD Forecast: Buying opportunity? Brexit silence may be a bliss, everything else just noise

Key quotes

“Parliamentary timetables and the need for proper scrutiny make it now virtually impossible for a deal to be formally ratified before the end of the transition period. Instead, if a deal is struck, it will likely be provisionally applied by the European Council (i.e. the EU member states) and the UK while it awaits formal approval by the UK and European parliaments (and potentially, EU national and regional parliaments).”

“There are presently three main sticking points that need to be overcome for a deal to be agreed: 1. Fish quotas, 2. ‘Level playing field’ provisions and 3. Governance of the deal. Of these, the most contentious is the level playing field.”

“It remains to be seen if a deal can be agreed in time even to apply provisionally. However, there are signs of movement on the EU side, and following a flurry of high level talks over the past week, Commission President Ursula von der Leyen has pledged to ‘go the extra mile’ in order to secure an agreement.”