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During the weekend, the UK Express came out with the news suggesting the start of the US-UK free trade agreement amid this week. The news also signaled that the trade talks exerts pressure on the European Union (EU) as far as the Brexit negotiations are concerned.

Key quotes

The significant move comes amid growing optimism that the two countries can have a first stage deal in place by the end of the year when the UK’s transition period with the EU comes to an end. 

 The International Trade Secretary Liz Truss and the US Trade Representative Robert Lighthizer are launching negotiations through a video conference call.  This first round of negotiations will last for around two weeks and will involve around 100 negotiators on each side.

Meanwhile, Tory MPs are pressing the government to ensure trade deals are in place to speed up Britain’s recovery from the coronavirus.

FX implications

Despite being the risk-positive news, the fears of the US-China trade war keep the US dollar strong against the majority of its counterparts amid the early Asian session on Monday. That said, the GBP/USD remains on the back foot around 1.2480 by the press time.