- GBP/USD consolidates in the holiday thin markets in positive territory.
- Brexit remains the key driver and bulls expecting a vaccine will boost economic recovery hopes.
GBP/USD is currently trading at 1.3357 between a range of 1.3321 and 1.3397 following a last-minute bid until ultra-thin markets kicked-in.
It is Thanksgiving today so markets are quiet and price action is non-existant in the North American shift.
However, for the week, the pound is the best performing G10 currency on a 1-day view.
Brexit is the focus
Brexit related optimism and prospects of a recovery in the UK economy with the hopes of a vaccine for the coronavirus have been the foundation to sterling’s success.
On the Brexit front, a skeleton trade deal between the EU and the UK appears to be priced in, analysts at Rabobank argued.
”A skinny trade deal potentially focused on the manufacturing sector would be billed as a victory by both sides.”
In other observations, the analysts noted that the reassuring headline in the Telegraph that PM Johnson is expected to talk with European Commission President von der Leyen in order to clear the final barriers, other reports are less optimistic.
”UK sources are also reported as suggesting that “Johnson will not water down his demands in order to get a deal”. This would appear to refer to the problematic issues of fisheries and the level playing field.”
”PM Johnson is treading a difficult path. His Brexit credentials mean that it will be difficult for him to backtrack on the issues of fisheries or a level playing field and keep his credibility intact,” the analysts explained.
Meanwhile, the latest is that Michel Barnier will to talk to ‘some’ EU fisheries ministers tomorrow to discuss the state of play in Brexit talks.
Fisheries have been a key sticking point in negotiations to reach a post-Brexit trade deal.
The EU has played down the importance of this meeting but it comes amid uncertainty over whether trade talks between the EU and the UK will be held in person this week.
Barnier had reportedly been due to come to London to resume face-to-face trade talks tomorrow but asked if they were expecting him, a Downing Street spokesperson said: “that’s a matter for the EU and a decision for them”.
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