Pound LIVE: GBP Sterling HOLDS against euro ahead of CRUNCH Brexit and interest rate talks

Pound LIVE: GBP Sterling HOLDS against euro ahead of CRUNCH Brexit and interest rate talks

Pound Sterling is trading at 1.1373 against the euro – marginally down from 1.1380 in early morning trading.

But the British currency is continuing to struggle against the US dollar, trading at 1.2910 after opening at 1.2933.

It is a crucial day for the pound, with markets braced for a potentially major breakthrough in Brexit and economic forecasts from the BoE.

Theresa May heads to Brussels for crunch talks with European leaders insisting the UK as she seeks to find common ground on the Northern Ireland backstop.

The Prime Minister’s visit comes in the wake of the latest war of words between the European Union and Britain, triggered by European Council President Donald Tusk saying there was a “special place in hell” for those who pushed Brexit without a plan.

Mrs May will use the top-level talks with Mr Tusk, European Commission President Jean-Claude Juncker and other prominent EU figures for legally binding agreements on the backstop.

BREXIT LIVE: May’s POINTLESS trip to Brussels – PM faces getting NOTHING from Eurocrats

Currently the backstop, which is intended to prevent the return of a hard border in Ireland, would see the UK continue to follow EU customs rules after a transition period if no wider trade deal had been reached.

Downing Street has said Mrs May is “open to different ways” of achieving her objectives in the backstop.

The Prime Minister will use the meetings to state Parliament has sent “an unequivocal message that change is required”.

But on Thursday, both Mr Tusk and Juncker, along with Irish Prime Minister Leo Varadkar, repeated the EU will not consider reopening discussions on the backstop.

It suggests Mrs May faces an uphill task to win the concessions required to get the Brexit deal struck between the EU and the UK at the end of last year voted through Parliament.

Daragh Maher, head of FX strategy at HSBC, told poundsterlinglive: “Tactically, GBP’s fortunes in February will hinge on the balance between the no deal threat from looming deadline on 29 March and whether that deadline will be reset with an extension of Article 50.

“Our near-term bearishness on GBP reflects our belief that we may have to run into March before the momentum for an Article 50 extension becomes irresistible, set against the threat of a cliff edge EU exit.

“In the meantime, GBP will face that ticking clock of a rising probability of the default no deal outcome even if a majority in parliament are clearly against it.”

Bank of England policymakers will also meet in London today but are widely expected to keep interest rates unchanged.

Kathy Lien, managing director of currency strategy at BK Asset Management does not anticipate any major changes until the terms of Brexit are fairly ironed out.

She said: “The BoE won’t even consider changing interest rates until the terms to leaving the EU become clear.

“BoE Governor Mark Carney will reiterate his warning about the risks of a disorderly Brexit and reassure investors that they are ready to increase stimulus if it causes a major disruption in the markets.”

Published at Thu, 07 Feb 2019 09:00:00 +0000

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