GBP/USD interbank rates are once again trading comfortably above 1.30, with the pound seeing its recent improvements mirrored against the greenback.
Sterling has once again seen its support spike amid rumour of a potential breakthrough in Brexit talks, although as of yet, there has been no announcement regarding any concessions that the EU have made.
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As it stands the current withdrawal agreement leaves the UK in no man’s land, with MP’s unlikely to reverse their decision unless they have guarantees over the Irish backstop, which is proving to be the decisive factor in their decision making.
Whilst it seems as though both sides are keen to avoid a no-deal scenario, uncertainty over the final agreement continues to cast a dark cloud over processing and is also likely to help support the USD from any aggressive losses in the short-term.
Whilst 1.30 has of course become a key benchmark for the pair, it still offers a huge of value for USD sellers. Some are of the opinion that the pound remains undervalued, particularly when you consider the historical value of the pair.
Whilst the US economy continues to provide solid economic numbers, despite its recent slowdown, any breakdown in its various trade disputes, alongside the US Fed's decision to reconsider its monetary policy stance, could lead to further weakness for the greenback.
Looking at the US, the key development yesterday were the reports regarding the much anticipated second meeting between US President Donald Trump and North Korean leader Kim Jong-un, which ended with no agreement being reached between with the two nations.
This was due to the fact that Korea wanted a full removal of the current sanctions to start the denuclearisation process. The US could not agree to this and as such the stalemate continues. Whilst the announcement did not have any major impact on the currency markets, any breakdown in the thawing relations between the two nations could cause political unrest in the long term, which in turn could impact the USD’s value.
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