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Negative Brexit Comments But Some Trade Deal Optimism Remains.

GBP
MNI (London)
  • Negative fall out from Wednesday's PM Johnson/EC vdLeyen dinner led to coming GBP under pressure through Thursday trade, GBP/USD extended its corrective pull back from its pre dinner high of $1.3478 to $1.3246 into NY.
  • Rate recovered to $1.3320 before it settled around $1.3300 into the close following a volatile NY session.
  • PM Johnson warning that there was 'a strong possibility UK and EU would fail to safeguard free trade past the end of the year' only saw minor reaction though it did act to counter GBP gains vs the USD as the latter came under pressure through Asia.
  • GBP/USD managed to nudge up to $1.3324, holding firm in Europe.
  • Considering the negative comments GBP continues to enjoy some optimistic buoyancy, market viewing noise from the UK side as a negotiating ploy, while any move away from talks by the EU side would be seen as a major negative factor.
  • BOE Financial Stability Report released at 0700GMT and provides early focus but Brexit headlines into the weekend (latest 'deadline' set for Sunday) remain key for GBP direction.
  • EUR strength and USD weakness also seen aiding GBP/USD's current buoyancy.
  • MNI Techs: GBPUSD traded weaker Thursday and conditions remain volatile. A bearish threat is also still present following the recent sell-off from 1.3539, Dec 4 high. Further weakness would expose 1.3196, Nov 19 low and 1.3191 the 50-day EMA. Cable did however trade above Monday's high of 1.3437 Wednesday, partially offsetting a bearish threat. Clearance of 1.3539, Dec 4 high is required to reinstate bullish conditions. Volatile.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com

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