Brexit Update: Brexit Talks Over?

Brexit Update:
Brexit Talks Over?

Less than three months left until the Brexit
transition period ends on December 31. Thereafter, the UK will trade with the
European Union under the terms set by the World Trade Organization (WTO), or
under a Brexit deal agreed by both sides. However, optimism for a deal is going
down the drain as the October 15 deadline set by PM Boris Johnson came due with
negotiations once again reaching an impasse. 

During the 2-day EU economic summit last week,
negotiators from both sides met for the last time to reason out a Brexit deal.
However, level playing fields and fisheries that remain the key sticking points
in negotiations once again shattered hopes for a deal. Last Friday, UK PM Boris
Johnson said that the time has come for both sides to prepare for a no-deal
Brexit unless the EU fundamentally changes their stance. Both sides are pinning
the blame on each other for not compromising; the EU said that they still
wanted a deal and that talks would continue, but not at any price. On the other
hand, the UK is constantly playing hardball with the EU, threatening that the
country is ready to leave the bloc without a deal.

During his statement last Friday, Johnson said that
they are prepared to embrace the alternative (no-deal) and will prosper as an
independent free-trading nation, gaining full control over their own laws.
German Chancellor Angela Merkel said that it would be in both sides’ best
interest if a deal was reached, but compromises on both sides are crucial.
However, French President Emmanuel Macron said that the UK is more desperate
for a deal than the 27-nation EU and that all the leaders are not responsible
for making PM Johnson happy.

The tone from both sides led investors to remain a
pessimistic view towards a Brexit deal, but most are not expecting a final
outcome in the near term. Aside from Brexit, the UK now faces pressure from a
second wave of the Covid-19, where London had announced restriction measures to
curb the virus. Uncertainties surrounding the pound led the pair of GBP/USD to
consolidate within the range of 1.3080 and 1.2680 since September.