EUR/GBP kept trading within a tight range around the 0.8900 mark during early European session on Wednesday, as concerns over progress in EU-UK trade negotiations continued to weigh on both the Sterling and the Euro.
The European Union’s chief Brexit negotiator, Michel Barnier, is expected to speak later today, while market players will be looking for clues over negotiations’ progress. Last week Barnier accused Britain of backtracking on a preliminary declaration agreed between the UK and the EU prior to January 31st, the date the UK officially parted ways with the EU.
“The UK continues to backtrack on the commitments made in this declaration,” Barnier said. “Even in those rare areas where we saw some conclusions, we fell short of what we agreed in the declaration.”
UK’s chief negotiator David Frost also confirmed progress had been limited, but in his view however, talks had been “positive in tone”.
“Negotiations will continue and we remain committed to a successful outcome,” Frost said. “We are close to reaching the limits of what we can achieve through the format of formal rounds. If we are to make progress, it is clear we must intensify and accelerate our work.”
Britain has a deadline until June 30th to ask for an extension of the current transition period.
As of 7:00 GMT on Wednesday EUR/GBP was edging down 0.15% to trade at 0.8895, as it has been moving in a tight daily range of 0.8894-0.8920. The minor pair has dipped 0.15% so far during the current week, after it retreated 0.90% in the business week ended on June 5th.
In terms of economic calendar, at 11:00 GMT today ECB Board Member Isabel Schnabel is scheduled to speak at an online seminar of the Florence School of Banking and Finance, while at 13:30 GMT ECB Board Member Luis de Guindos is expected to speak at a virtual event organised by the Institute of International and European Affairs (IIEA).
Bond Yield Spread
The spread between 2-year UK and 2-year German bond yields, which reflects the flow of funds in a short term, equaled 60.3 basis points (0.603%) as of 6:15 GMT on Wednesday, down from 62.5 basis points on June 9th.
Daily Pivot Levels (traditional method of calculation)
Central Pivot – 0.8904
R1 – 0.8943
R2 – 0.8978
R3 – 0.9018
R4 – 0.9057
S1 – 0.8869
S2 – 0.8829
S3 – 0.8794
S4 – 0.8760