GBP : Brexit Talks Resume

(Tue, 29 Sept 2020). GBP/USD is rising, EUR/GBP is falling and many of the Sterling crosses are heading higher as traders move cautiously into riskier assets and take profits on the bullish USD trade. That’s despite a continuing lack of progress in the talks between the EU and the UK on their post-Brexit relationship, with both sides saying a deal is still some way off.

GBP/USD HEADS HIGHER

GBP/USD is firmer and Sterling is also higher against most other currencies as the appetite for riskier assets increases and traders who were long the safe-haven US Dollar realize some of their gains.

That profit-taking could continue for a while yet but a change from the recent risk-off trend seems unlikely longer term as global coronavirus deaths top one million – casting doubts on an economic recovery – and progress on a US fiscal stimulus package remains limited ahead of the first US Presidential debate at 0100 GMT Wednesday.

Meanwhile, both sides involved in the current talks in Brussels between the EU and the UK on their post-Brexit relationship say a deal is still some way off. This is likely to be a key week for the negotiations, with the two sides still far apart on trade and the divorce deal, with the UK government determined to pass its Internal Market Bill that would undermine the Withdrawal Agreement.

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