- DUP leader, Arlene Foster, has been vocal about how Northern Ireland and UK customs Union.
- Risk of a move back below September highs of 1.2580 if draft deal optimism breaksdown.
Following the news that there appears to be an agreement on the Irish border between PM Johnson and EU leaders, lifting the Pound against the US Dollar to the 200 Day moving average for the first time since May of this year, the DUP leader, Arlene Foster, has been vocal about how Northern Ireland must remain within the UK customs union, and entirely within the UK – Foster says she “will do what’s best for the Union” when asked if she will support a deal.
DUP leader, Arlene Foster recent comments:
- Some of the speculation since the UK and Irish prime ministers met last week is very far off the mark.
- We must remain within the UK customs union, entirely within the UK.
- What we have to see is flexibility from the EU, just as we have shown on single market relations.
- The British PM knows our position.
FX implications:
The DUP has already warned that the “problem is that the EU and Republic of Ireland see it as a chance to push for more,” arguing that the DUP will not back a Brexit deal if Johnson makes more concessions. This all suggests bad news for the Pound if Johnson moves any closer to EU demands for something resembling the Northern Ireland-only backstop which was rejected by the DUP last year – Indeed, his chances of passing a deal through Parliament will be greatly reduced. DUP’s leader is to meet with Johnson tonight.
GBP/USD is at risk of closing below the 200-DMA and should the DUP not support the progress being made with respect to the Irish border, then we are back to square one again, which opens the risk of a move back below the September highs of and 1.2580.
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