The Pound is consolidating. Overview for 28.12.2020
GBPUSD stopped growing; after the Christmas celebration, the asset is consolidating.
The British Pound slowed down its growth against the USD due to the Christmas calmness on the market. The current quote for the instrument is 1.3566.
So, the United Kingdom and the European Union managed to make a deal on the trade agreement just days shy of the deadline. The agreement, which has 1,246 pages, covers aspects of fishing, borders, and arguable points of trade relations. Starting from December 31st, when London is scheduled to exit the alliance, trade operations will be made without quotas and fees. However, it doesn’t cover services and financial proposals.
Probably, the catalysts for finding a final decision was the closure of the border between France and the United Kingdom due to a new strain of the coronavirus, which was considered by many as more aggressive and dangerous. It was a vivid picture of what might happen if the alliance countries had borders with the UK. Even if it didn’t happen, market players still had an excellent opportunity to see a possible collapse, which might have taken place without the Brexit agreement.
From now on, investors will have to go with the flow and just watch how the parties are going to fulfill their parts of the agreement. One can say almost certainly that there will be updates and revisions but they will deal with technical matters.
Reaching an agreement finally is a good sign for the Pound but later the British currency will bend with the wind.