The Pound has moved higher this morning as market risk appetite improves and after reports indicate the EU might be ready to make concessions on UK fisheries.
Reuters have reported this morning that the EU might be willing to flex on their strict stance on trying to maintain the status quo on fisheries after the UK leaves the EU. Although their ‘level playing field’ red line is the most concerning issue, it’s still encouraging they’re starting to move on their negotiating positions and this has provided more optimism around Brexit trade talks, which has boosted the Pound.
An increase in market risk appetite has also supported Sterling this morning as investors become more optimistic about economies re-opening after extensive lockdown periods and increased hopes around potential Covid-19 vaccines. For now, traders also appear to be shrugging off the increasing tensions between the US and China. There can be new twists around this at any time though (particularly from President Trump), so markets will be ready to jump on any new announcements.
As a result, the GBP/USD has pushed up by over 1% today and now trades at a 2-week high. The GBP/EUR is up around 0.5% today and at an 11-day high.
The UK and EU are set to return for their final round of Brexit negotiations next week before the 30th June deadline (for any transition extension). It’s likely this decision will go down to the wire, so watch out for Pound volatility over the next few weeks.