Brexit is beginning to draw attention once more... Will the Brits bring down the EU Project?
For those looking for direction in the Pound, it has become somewhat challenging.
Dollar weakness has masked key fragilities in the Pound that will persist for some time to come.
Many across the global financial markets and even across Britain may have preferred ripping off the Band-Aid.
After all, you can only begin rebuilding after you have reached your destination. Well, that’s what the Brexiteers thought. In fact, we all did.
Never in a million years did we expect the nonsense to continue into the summer of 2020…
It hasn’t been the most positive week for the Brexiteers. EU and British negotiators seem to be worlds apart on reaching a conclusion to negotiations.
Alarmingly, the EU has almost conceded that few options remain other than Britain extending the transition period.
Earlier in the day, the FT reported that EU member states have concerns over a hard Brexit and COVID-19.
If you shift across to the British tabloids, there’s talk of Barnier being under pressure. It’s hardly surprising when considering the pressure on the EU to maintain access to UK fisheries…
Beyond the chatter and the harsh facts that both sides are at loggerheads is one reality. Britain is heading for a hard Brexit and the EU is clearly not happy about it.
Following the May fanfare of Britain and the U.S entering into trade negotiations, the focus shifted to Japan this week.
Will the British government really struggle to find common ground with old alliances? Perhaps this is the miscalculation across EU member states.
Relationships have existed for decades if not longer. The British government can even throw in the monarchy to rollout agreements with non-EU countries. Even with some EU member states…
Perhaps Brussels thought that the crown jewels wielded little power. We have, in fact, yet to know…
One hazards a guess, however, that history will dictate the fate of Britain and not the EU’s attempts to keep the project glued together.
When we look at the EU’s concerns over the COVID-19 pandemic, EU member states need to be cognizant of one key issue.
As an island, Britain could have quite easily avoided the pandemic and the highest number of deaths in the EU.
In fact, shutting down borders and battening the hatches would have made perfect sense. As mentioned before, however, the UK government facilitated the freedom of movement for as long as possible.
We are yet at the blame game stage… After all, we have 2-weeks remaining before that end of June deadline.
Upon taking number 10, the British Prime Minister was clear. There will be no extension to the transition period. This was later clarified. The COVID-19 pandemic will not cause a delay to the UK government’s plans…
Some may have considered the pandemic as a perfect opportunity for the government to go in search of a better deal.
Remarkably, considering the uncertainty that lies ahead, the Pound has stood up against the Greenback.
It’s not out of the woods just yet, however, and a snapback or a flash crash is not inconceivable.
At a minimum, Johnson et al will need to close out unilateral trade agreements with just about everyone. Only then can the concept of a hard Brexit be watered down.
We will certainly expect negotiators to come under greater scrutiny in the coming weeks. It wouldn’t be the first time that the markets waited until the last minute to refocus…
At the time of writing, the Pound was up by 0.19% against the Dollar. If it was not down to the uncertainty over the FED…
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With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.