GBP / USD consolidates around 1.3350 and Brexit negotiations remain stalled on fisheries

• GBP / USD is moving sideways near 1.3350, as traders await more Brexit developments.
• The EU rejected the UK’s improved offer on fisheries, but talks are continuing with some still waiting for an imminent breakthrough.

He GBP/USD It has stabilized in the 1.3350 region in recent trade, slightly above the session lows around 1.3300, but still lower on the day at about 110 pips or 0.8%. After having risen above 90.50 before the end of the European trading session, the dollar index (DXY) has been going sideways in the 90.60 in recent trading; This previous USD strength was the main factor pushing GBP / USD lower from 1.3400 earlier in the day, although the current Brexit angst (below) isn’t helping either and probably explains why GBP is the G10 currency. underperforming in the day.

Trading conditions have calmed down noticeably in the last few hours since the exit of European market operators at the time of the EU cash close. Poor conditions this week before Christmas mean that while currency markets are likely to be in range most of the time, the lack of market depth could leave pairs vulnerable to sudden moves. This will be more relevant for sterling pairs, as the volatility-inducing Brexit saga drags on and remains a mystery as to whether the two sides will be able to reach a deal before the end of the year or not.

Brexit update: Back on the UK pitch, will they improve their fishing supply?

It has been another barrage of mixed opinions on the state of the Brexit negotiations, but what is clear is that the EU’s response to the new UK offer on fisheries was a resounding NO; The EU’s chief Brexit negotiator Barnier told EU ambassadors that the UK’s new offer that the EU should reimburse the UK for 35% of the value of catches made in UK waters would not it included pelagic stocks, which means that the supply was closer to 60%. He reportedly said: “It’s not 25% vs. 35%, it’s 25% vs. 60%,” referring to the current EU demand that it only wants to reimburse the UK for up to 25% of its catch. in UK waters. Clearly, then the two sides are still very far apart.

So the ball is now well back on the court in the UK. Will they improve their fishing offer? Will there be a candy to cross the final gap between the two sides? From the looks of it, the negotiating teams are hard at work in the background. A BBC report even suggested that rumors were circulating in Brussels that a deal was closing, but had not yet done so. The Sun, citing UK sources, reported that “there is an agreement on the table and both parties want to be home by Christmas Eve” and ITV reported that negotiating teams are aiming to reach an agreement on Wednesday night. (although apparently neither party is overly confident that this will be possible).

So the news has not been all bad. Some other factors to watch out for for GBP include the news that the UK and France have apparently reached an agreement that will allow freight trips to France from the UK to resume, with soldiers reportedly leaving. will be deployed to test truck drivers leaving the UK. . France has told the EU ambassadors that cargo trips will resume from midnight.

Meanwhile, Germany has extended its travel ban from the UK until January 6; Concerns regarding the spread of the new Covid-19 variant that has been detected in the UK may continue to weigh on the British pound (and be another reason the pound is at the bottom of the chart of G10 FX performance on Tuesday). But this problem could be about to go global; the US CDC warned that the new, more virulent strain could be spreading in the US undetected.