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  • GBP/USD gained strong positive traction on Wednesday amid hopes for a last-minute Brexit deal.
  • The EU member states have been told to be ready for a provisional application of the new UK deal.
  • An EU diplomat was cited saying that a deal is pretty much there and could be announced soon.

The buying interest around the British pound picked up pace in the last hour and pushed the GBP/USD pair further beyond mid-1.3400s, or fresh daily tops.

The pair caught some fresh bids during the early North American session and added to its goodish intraday gains in reaction to positive Brexit-related developments. According to the latest headlines, the EU member states have been told by the European Commission to be ready for a meeting on Thursday morning for the provisional application of the new UK trade deal.

Separately, an EU diplomat was cited by Reuters saying that a post-Brexit trade deal is pretty much there and it is a matter of announcing it today or tomorrow. This, in turn, was seen as one of the key factors that provided a strong lift to the British pound and might have already set the stage for the bulls to aim back to reclaim the key 1.3500 psychological mark.

Apart from this, the reopening of the UK-French border was seen as a step back toward normality after the discovery of a new variant of the coronavirus in the UK. This remained supportive of a positive trading sentiment around the equity markets, which undermined the US dollar’s relative safe-haven status and provided an additional boost to the GBP/USD pair.

Meanwhile, investors seemed to have largely shrugged off the US President Donald Trump’s threat to not sign a long-awaited COVID-19 stimulus bill. Even Wednesday’s mostly upbeat US macro data – headline Durable Goods Orders and Initial Weekly Jobless Claims – also did little to impress the USD bulls or dent the intraday bullish sentiment surrounding the GBP/USD pair.

That said, investors might still wait for an official confirmation before placing any aggressive bullish bets amid relatively thin liquidity conditions ahead of the Christmas Holidays.

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