GBP jumps on EU concession talk
We have again seen some stabilisation in the Pound over the last 24 hours with yesterday's Cable dip under 1.2200 finding support despite taking out the previous base just ahead of the figure level. This coincided with a EUR/GBP move which ran into offers at 0.9000 - much as we anticipated. Even though there is little progress in the Brexit talks, sections of the market believe there will have to be a delay in the deadline, with Parliament voting in favour of extending the withdrawal date through the Benn Act.
Any suggestions that the PM will refuse to ask for an extension or find a way to avoid the ruling to do so, will, therefore, have a negative impact on the Pound going forward. For now, though, we are in wait and see mode, as we continue to monitor reports of dialogue between the 2 sides.
EUR/GBP also took a dip, trading down to 0.8940, but losses here have also been retraced in large part, with the cross rate now trading circa 0.8970 to keep the prospect of another test on 0.9000 alive for now.