Summary:
- Boris Johnson is expected to put a proposal to the EU later today
- The EU denies it is ready to for any concessions on Irish backstop
- GBP is slightly lower this morning after hectic trading yesterday
The British pound is likely to experience heightened volatility over the next couple of hours as UK Prime Minister Boris Johnson is expected to issue an ultimatum to the European Union. Johnson could propose to the block to either negotiate Brexit on his terms within the next nine days, or face a no-deal divorce, according to Bloomberg. On top of that, Johnson will also propose scrapping the so-called Irish border backstop, which is the most contentious part of the current deal. Instead, Johnson will propose placing Northern Ireland in a temporary regime with a time limit, in a way that customs checks would be required between Northern Ireland and the Republic of Ireland. Nevertheless, the EU is likely to oppose both new terms put forward by UK PM and a removal of the Irish backstop. Let us also recall that the pound rallied on Tuesday on the news that Brussels was ready for concessions over the backstop. It corrected its gains after the EU denied these revelations. Brace yourself for tumultuous trading on the pound on Wednesday!
The GBPUSD is moving down this morning against the US dollar and from a technical point of view bears seem to hold an advantage. Source: xStation5
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