GBP price, Brexit news and analysis:
- European Commission President Ursula von der Leyen says formal UK-EU trade talks will begin at the end of February or early March.
- Brexit is a wake-up call for the EU, says German President Angela Merkel.
- GBP/USD is edging higher in a market dominated by talk of a UK interest rate cut soon.
GBP/USD clambers back above 1.30 level
Formal trade talks between the UK and the EU will begin at the end of February or early March and simultaneously cover a range of issues, according to European Commission President Ursula von der Leyen in an official visit to Dublin Wednesday. Moreover, the bloc is ready to work “day and night” to reach a post-Brexit trade deal with the UK by the year-end deadline, she added.
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Any such deal would likely be positive for Sterling, although trading in GBP/USD and the GBP crosses is currently dominated by talk of a UK interest rate cut soon. The probability of a quarter-point reduction to 0.5% at the end of this month is currently 60%, according to the overnight index swaps market; however, GBP/USD is currently edging higher and has moved back above the psychologically important 1.30 level.
GBP/USD Price Chart, One-Hour Timeframe (January 13-16, 2020)
Chart by IG (You can click on it for a larger image)
In a further Brexit development, German Chancellor Angela Merkel has warned thatBrexit is a “wake-up call” for the EU. In an interview with the Financial Times, she argued that a post-Brexit UK that reserves the right to diverge from EU rules on goods, workers’ rights, taxes and environmental standards could create a serious economic competitor on its doorstep.
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— Written by Martin Essex, Analyst and Editor