EUR / GBP falls back to daily highs at 0.9030 on news that the UK says Brexit negotiations are in a ‘dire situation’.

• The UK appears to be publicly pressuring Brussels to engage on the fisheries issue in the Brexit negotiations.
• EUR / GBP has risen again towards the highs of the day at 0.9030 as a result.

He EUR/GBP has returned to the day’s highs at 0.9030 in recent trading following a negative statement from the UK government following a call between British Prime Minister Boris Johnson and EU Commission Chair von der Leyen. On the day, the pair is now trading flat.

Johnson / Von der Leyen call-up fails to advance

The British Prime Minister, Boris Johnson, and the President of the EU Commission, von der Leyen, continued the telephone conversations. The post-call statement from the EU was brief, noting that the EU welcomed substantial progress on many issues, but also noted that large gaps remain to be bridged, particularly in fisheries, and overcoming them will be a major challenge.

The UK’s post-call statement took a much more negative tone, noting that the British Prime Minister had stressed that the negotiations were now in a “dire situation”, that time was short and that a no-deal was inevitable. if the EU does not change its position.

The UK statement noted that the gap on the level playing field had narrowed, but differences remained. On fisheries, the statement noted how the UK Prime Minister had told von der Leyen that the EU position was “simply not reasonable”, and the Prime Minister highlighted how the UK could not accept a situation in the that it was the only sovereign nation in the world that could not control access to its own waters and face fishing quotas that would put its own industry at a disadvantage.

Most market commentators interpreted the UK statement as a way to publicly raise opposition in the negotiations / publicly pressure Brussels to compromise. More of this public stance is expected in the coming days as the clock ticks further and further towards the end of the month, when the UK is formally scheduled to exit the single EU markets and begin trading with the bloc in the terms of the WTO.

EUR / GBP reverses above its 21, 50 and 200 DMAs

The recent rise in EUR / GBP has seen the pair retreat above its 21-, 50- and 200-day moving averages, which sit at 0.9005, 0.9015 and 0.8988 respectively. Furthermore, support just above the 0.8980 level (Dec 4-9 lows) was again difficult to break on Thursday.

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