Hopes Rest On EU Response To White Paper
GBP traders on edge today as the UK Brexit White Paper is due for release, with the EU response front and centre of market focus. New Brexit minister Dominic Raab is also due to meet chief negotiator Barnier in Brussels next week, however, he will speak with him later today to break the ice. Naturally, the new minister is bullish on the proposals, describing it as a 'good one', and he expects parliament to back the deal though there will be plenty of scepticism over this.
As we have already pointed out, the EU's acceptance is critical for Theresa May, having bent the red lines somewhat to accommodate both the EU and some of the UK based businesses who have voiced their concerns over the lack of progress in the talks. This has prompted clear responses from ardent Brexiteers such has Davis and Johnson, who have both voted with their feet and resigned from cabinet.
Cable in the meantime is finding some support under 1.3200, with hopes that some sort of favour will be found among EU members. Michel Barnier has welcomed some aspects of the proposals which have been outlined in the press. Irish PM Varadkar has also suggested that some flexibility should be adopted in the negotiations and this looks to be in response to Theresa May's steer towards a softer line in the talks. Pre 1.3300 is still the major stumbling block here. Traders are also not letting go of the bid in EUR/GBP, which continues to print a series of higher lows with a view to retesting the bank of offers from 0.8900.