Following what seemed to be a neverending period, Great Britain finally left the EU on January 31st, after 47 years of membership. And right now, everybody is looking forward to seeing how this new era will affect many areas, including trade.
As expected, Brexit didn’t go unnoticed within the market, with the GBP/USD pair falling below the 1.30 benchmark.
No signs of progress so far
As the talks regarding how Great Britain will look after Brexit began, the conjecture was also present. However, this didn’t provide any solid direction for the market, as both sides – GB and EU – are trying to impose their will on how the future will look.
Sure, the lack of positive progress in the market also comes as an effect of the Coronavirus outbreak. As the virus continues spreading, several markets, from all across the world, especially in Asia, switched to panic mode.
Considering that China is one of the world’s biggest economic powers, everything had a real domino effect.
The negotiations will surely take time
At the moment, it appears that UK Prime Minister Boris Johnson and EU Chief Negotiator Michel Barnier have different views regarding the way a Britain – EU relationship should look like. It appears that the talks between the two could take place several times, until December 2020, when they should reach a common point regarding a future landscape.
As for the forex market, the GBP/USD market remains low, as we’re closer to the first full Brexit week. The pair has reached its lowest point of the year so far, as well as the lowest since December 24.
Traders are looking forward to positive news on Monday, on the geopolitical front, even though this seems unlikely to happen, with the crisis in China continuing. Also, the UK doesn’t appear to be in the mood to leave its view on EU trade relations behind.