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RationalFX : Sterling hits 3 week highs against USD and Euro

RationalFX : Sterling rose to three week highs against both the EUR and USD yesterday amid renewed optimism a Brexit trade deal can be reached by the end of this year following reports that the EU are willing to make concessions on their fisheries policy …

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Fishing rights have been a key stumbling block in UK-EU trade talks up until now, but a newly published transcript between EU Chief Negotiator Michel Barnier and his EU counterparts suggest the EU may be willing to compromise on this contentious issue. According to the transcript, Barnier confirmed that the EU could support a UK proposal of zonal attachment which divides fishing quotas according to data that reflects the number of fish in British waters. Barnier has also backtracked on the requirement the EU are to be given the same access to UK waters admitting the policy was “clearly not balanced”.

The news follows an announcement from a PM spokesman yesterday, that informal talks were due to take place at dinner overnight which added further optimism amongst investors that Brexit progress could be in sight.

Outside of Brexit, traders will be monitoring Rishi Sunak’s Summer Statement today to see if a fresh set of fiscal initiatives are announced. It is being reported that the Chancellor will announce a £2bn temporary job creating scheme for under-25s, an immediate stamp duty holiday for some house purchases and potentially a cut to VAT in the hospitality sector. Despite this, market expectations for sizeable stimulus measures are relatively low given the underwhelming nature of Boris Johnson’s spending proposals a week earlier.

Key announcements

12:30 – UK – Chancellor Rishi Sunak Summer Statement

Source : ETFWorld.co.uk

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