The EURGBP pair significantly high at the moment, trying to test the 0.8600 resistance line above. At the moment of writing the price hovers around 0.8550.
UK Prime Minister Boris Johnson is set to fly to Paris on Friday to meet with French President Emmanuel Macron, where fishing entree for French boats in UK waters will likely be at the top of the agenda.
There is rising rumors of the EU interrupting its trade deal with the UK, should the British government make unilateral changes to the Northern Ireland protocol. Nevertheless, fresh Brexit indecision may actually not have as big a market impact as possibly accepted.
ING said “On paper then, an increased layer of uncertainty and the reintroduction of a negative economic tail risk is bad news for UK markets. But there are a few reasons why the return of Brexit may not be dramatic for sterling.”
“Could another round of Brexit headlines demand the kind of 5% ‘no deal’ risk premium seen in 2019? We suspect the impact on GBP is more muted this time around.”
“With UK CPI heading to the 5% area into April, keeping BoE tightening prospects on the front-burner, we are happy with an end-year EUR/GBP target near 0.8500, and lower levels as 2022 progresses.”
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