Pound Pops on Hopes of Provisional Brexit Deal

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Market Drivers March 19, 2018
Pound takes out 1.4000
EZ Trade misses
Nikkei -0.90% Dax -0.92%
Oil $62/bbl
Gold $1311/oz.
Bitcoin $8150

Europe and Asia:
EUR Trade 19B vs. 22B

North America:
No data

Cable popped in early London trade today taking out the key 1.4000 level to the topside on news that EU Brexit negotiators summoned senior diplomats from the union for an emergency meeting.

There is a presser scheduled for 11:45 GMT suggesting that some sort of a breakthrough may have been reached and that two sides may have come to a provisional agreement.

The key stumbling block between the two parties is the Irish border issue and if UK gave in on the idea that the border between Northern Ireland and Ireland will remain open that would go a very long way towards resolving the stickiest part of the deal.

Markets were clearly anticipating a positive result with cable strongly bid ahead of the presser. The pair has been in a slow consolidation pattern for the past month and a clear move to the upside could point to a rally all the way towards the 1.4500 barrier as markets begin to believe that some sort of a negotiated soft Brexit becomes a reality.

UK also has a slew of economic releases on the docket this week as well the BOE meeting and all those events will be looked at through the prism of today’s news which could be a catalyst for a major move in the pair for the rest of the week.

Boris Schlossberg
Managing Director

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