The Pound is rising a little bit. Overview for 17.11.2020

GBPUSD is back to growing despite quite alarming signals from the Brexit talks.

The British Pound remains “in the black” against the USD on Tuesday afternoon. The current quote for the instrument is 1.3222.

Less and less time is left for the Brexit trade agreement. Yesterday, the European Union once again warned the United Kingdom that there weren’t many possible scenarios for the trade agreement left and that might be a serious problem for ratification of the agreements, which were still possible to conclude. It’s been almost five years since the popular referendum when the Brits voted to lead the European Union but the parties still haven’t been able to agree on trade and borders. 

It might well be that the parties won’t be able to arrive at a consensus, more especially as Ireland, for example, believes that only a week left for negotiations. In this case, the United Kingdom will exit the alliance without the trade agreement, i.e., without the deal it started all this drama for. The country, which is already devastated by the pandemic and multiple restrictions in business, will be hurt much more. 

The agreement-less Brexit will be a significant stress for financial markets. Trade circulation between the UK and the EU is about 1 billion USD per year and it’s still unclear how supply chains will work for British companies inside and outside of Europe.  

However, it seems like the Pound is currently ignoring risks of the “hardcore” Brexit scenario, which now seems rather inevitable, despite the fact that a year ago market players were really afraid of them.