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Rumours are swirling in Brussels that a Brexit deal is “close but not quite there”, tweeted BBC’s Katya Adler. She then cited the Cheif EU Brexit Negotiator Michel Barnier as saying “we are really in a crucial moment and are giving it a final push.”

Context

The UK made a significant improvement to its offer to the EU on its rights in UK fishing waters on Monday, dropping its demand for a rebate of 60% of the value of all fish caught in UK waters over the next five years to 35%, not far from the EU’s demand that it only reimburse the UK for 25% of the fish caught in UK waters. A flurry of activity has subsequently gone down behind the scenes, with the UK PM reportedly holding secret phone calls with European Commission President von der Leyen. These reports from the BBC’s Katya Adler are the first to suggest that a deal might now be close. 

Market Reaction

GBP/USD somewhat surprisingly seems asleep at the wheel, hardly budging at all despite the fact that the latest update seems to imply a significantly higher probability that the EU and UK will be able to thrash out a deal by the end of the year. 

GBP/USD recently slipped below 1.3400 and towards 1.3350 amid a pick up in USD and EUR/GBP remains well supported above the 0.9100 handle.