Brexit Stalemate as Sterling Loosens, EURO steady on ECB release

Azeez Mustapha
11 December 2020 | Updated: 11 December 2020

Sterling relented again after the Brussels meeting ended with nothing more than comments that the UK and the EU were still far apart. Meanwhile, the euro is ambiguous as the ECB’s policy is expected to be revised.

GBP/USD increased its losses, falling to a fresh bottom of 1.3184, the lowest level since November 18. Sterling was previously struck by fears of a no-deal after European Commission President Ursula von der Leyen said the odds of no deal being dealt are higher than reaching an agreement. British Prime Minister Boris Johnson said Thursday that there is a “high likelihood” of leaving the EU without a deal.

The so-called “Last Supper” between British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen ended without much progress. The positions of both sides remained “far apart”, and a new deadline for further negotiations has been set this week.

Andrew Bailey, Governor of the Bank of England, highlighted the limitations on what his institution can do to mitigate the impact at the end of the Brexit transition. Bailey also added that work on negative interest rates is still ongoing. The Bank of England will meet next week to announce its latest decision in a year.
EURO Steady on ECB Release
The euro also strengthened after the ECB expanded and expanded the PEPP as expected by the markets.

EU Financial Services Commissioner Mairead McGuinness said separately: “Today we are preparing contingency plans, very specific and very narrowly focused, to ensure that in the event of a ‘deal breakdown’ vulnerable sectors such as transport, aviation, etc. these specific plans are made to keep in touch. “

The ECB today announced a package of measures, including the expansion and extension of the Pandemic Emergency Procurement Program (PEPP). These measures are aimed at “maintaining favorable financing conditions during a pandemic, thereby supporting the flow of loans to all sectors of the economy, supporting economic activity and ensuring medium-term price stability.” The ECB is also ready to “be ready to adjust all its instruments if necessary”.

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Azeez Mustapha

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.