Sources from the European Union Economic Summit have informed that Prime Minister Boris Johnson is right on track to deliver on his promise of finalizing a Brexit deal with the EU before the end of the month. Thursday, October 17th, 2019 marked the start of the EU Summit in Brussels. EU’s lead negotiator for Brexit, Mr. Michel Barnier, had previously requested an agreement in written form to be submitted before the end of Tuesday in order for the discussion on Brexit to be pushed further in the EU Summit. The latest development after one day of Summit has highlighted that Mr. Johnson has succeeded in getting the blessings of the EU27 leaders on the current terms and conditions of the deal.
Following the first approval from the European Union leaders, the deal is now expected to be presented to the parliament of the United Kingdom on Saturday for voting. In an event that the current Brexit deal gets the majority vote in the UK’s parliament, the United Kingdom will be set to leave the European Union in a timely and orderly fashion by 23:00 GMT on October 31st, 2019.
Initial Response To The Brexit Optimism
In line with the earlier forecasts, the news has fueled a roar in the financial markets. Sterling was immediately pushed as high as 1.2988 against the U.S dollar. Compared to Euro, it made a high of 1.1661 for the day. The impact of the macroeconomic news was by no means confined to UK’s or European markets. Following the Brexit optimism, EUR/USD pair was seen trading at a high of 1.1140 level.
DUP To Vote Against The Deal
While the Pound continues to trade reasonably higher, the GBP/USD pair lost significant gains after the announcement by the Democratic Unionist Party (DUP) of Northern Ireland that its stance remains firm at voting against the deal. Initially, it was being expected that the DUP has been brought to terms with the UK’s current proposal as well. However, following the official statement by Ms. Arlene Foster, the market gave the way back to uncertainty that retreated the GBP/USD pair back to a low of 1.2750 level. The pair currently trades at 1.2860.
The specifics of what the deal entails have not yet been made public. The final market sentiment and intention for the long-term will be made clear once the outcome of voting in the UK’s parliament is out by the end of Saturday and the finer details of the deal are declared. Until then, traders can expect to be confronted with extreme volatility in the financial markets.