PM Theresa May made a trip to Brussels on a short notice. So far, it seems that this trip is not yielding any fruits.
GBP/USD is falling to support at 1.3230. Further support awaits only at 1.3110. Resistance is at 1.3340.
May, alongside Brexit minister David Davis, flew to the Belgian capital to meet with Jean-Claude Juncker and Michel Barnier, the chief EU negotiator. This high-level meeting was supposed to break the deadlock that talks have reached last week.
Later this week, EU leaders will convene and assess if enough progress has been made in order to proceed to the second phase of talks: the future arrangements after Britain leaves. Currently, talks focus on the exit terms, on the divorce.
According to a fresh report, the talks remain in a deadlock due to the divorce bill: May offers some 20 billion while Brussels wants more than double. Various sums are reported.
All in all, the sequencing and the high bill form part of what growingly looks like a tough stance from the EU in order to deter other countries to make similar moves. Moreover, the EU is treating the UK like Greece. This includes portraying British negotiators as not being serious enough, saying they don’t bring any offers to the table and demanding concessions before agreeing to talk about further topics.
Will the pound extend its falls from here? There are good reasons to believe it will. EU negotiators are hard to satisfy.
Further reading: What’s next for EUR/USD and GBP/USD?Get the 5 most predictable currency pairs