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Original title: UK plans to set a deadline for trade negotiations, but is it also planning to unilaterally break the contract?GBPDiving approaching 1.32, unable to hold 21-day moving average may drop to 1.30
On September 6 (last Sunday), British media reported that British Prime Minister Johnson had issued an ultimatum to the EU and high-level negotiators, stating that the deadline for the two sides to reach a free trade agreement was October 15. He will make a formal statement on September 7. It is also reported that the UK is planning to introduce new legislation to repeal a key part of the UK withdrawal agreement, which may lead to the collapse of trade negotiations between the UK and the EU. Due to the lack of progress in the Brexit transition negotiations, the pound’s slide expanded to 0.5% on September 7, approaching the 1.32 mark, and will then challenge the support of the 21 moving average. days.
Johnson intends to send a letter to the EU, setting October 15 as the deadline for the Brexit deal.
Negotiations between the UK and the EU have made no progress since February, with now only five weeks left to reach a trade deal. British Prime Minister Johnson will warn on September 7 to rule out the possibility of postponing Brexit negotiations until after October 15.
As the negotiations are stalled, Johnson will say that EU negotiators must “reconsider their current positions” and that the agreement must be finalized at the EU summit on October 15 to enter into force before the end of the year. If the two sides do not reach an agreement by October 15, the UK will withdraw from Brexit negotiations and is ready to conduct Australian-style trade with the EU. Johnson is reported to have urged senior cabinet official Michael Gove to prepare the British government for a no-deal Brexit.
Britain left the European Union on January 31, but the new trade deal has made little progress. As Britain insisted on full autonomy in state aid and fisheries, the negotiations were at a standstill. Negotiations between the UK and the EU will resume on September 8.
As early as September 6, Frost, Britain’s chief representative of the “Brexit” negotiations, hinted that progress in this week’s negotiations may be limited. He said: “We will engage in constructive negotiations with the EU, but the EU position may limit the progress we can make this week. We have made clear from the beginning what we can accept in the area of state aid and fisheries.” A lot of time has been set aside for discussions and we should do the same in the current negotiations. “
Frost also said: “The UK will not become a vassal state of the EU. This time the UK will not turn a blind eye. We are not going to compromise control of our own laws. The EU must realize that the UK Kingdom is serious “. Consider leaving the European Union with an Australian-style business relationship. The British government is not afraid to leave the negotiations without a trade deal due to take effect in 2021. The UK is ready for various Brexit scenarios.
UK government sources have warned that unless the EU is aware of the seriousness of the UK’s “no-deal Brexit” approach, Brexit negotiations will be over in a few days.
Britain plans to unilaterally undermine the Brexit treaty, negotiations face threats, pound declines approaching 1.32.
According to the British “Times” report, the European Union requires the potential to veto laws and regulations after Brexit. Barnier, the main representative of the EU Brexit negotiations, tweeted that the EU hopes to reach a trade deal with the UK, but will do nothing at all costs. The EU requirements are clear and simple, that is, free and fair trade.
However, according to the British report “Financial Times”, the UK is planning to introduce new legislation to overthrow the key part of the British withdrawal agreement, which may lead to the collapse of trade negotiations between the UK and the EU.
According to three people familiar with the matter, the internal market bill to be announced on Wednesday is expected to “abolish the legal effect of part of the withdrawal agreement”, including government assistance and Northern Ireland customs. A person familiar with the matter said the move would “obviously and consciously” undermine the Northern Ireland accord signed by Prime Minister Johnson in October last year, which aims to avoid a hard border in the region. A government spokesman said the government is working to resolve the outstanding issues of the Northern Ireland Protocol and is considering withdrawing if the goal is not achieved.
As early as September 4, it was reported that senior officials in the British Prime Minister’s Office revealed that the risk of a no-deal Brexit from Britain is increasing due to the current stalemate in negotiations. At present, the heart of the negotiations between the two parties lies in the support of the industry and fisheries policies. A British source close to the negotiations between the two sides revealed that the EU is slowing down the progress of the negotiations, but the UK expects the EU to recognize its requirements on the UK in terms of industrial support and fisheries policy “comparable to status. Britain as an independent country. Contradiction. ” According to the report, the volume of trade between the UK and Europe is approaching $ 1 trillion. If the UK cannot reach a deal before Brexit, it will have a serious impact on the financial market. At the same time, European countries will also face more severe economic turmoil when the new corona epidemic is severely affected. .
Yields on British two- and five-year government bonds have leveled off, which should provide some temporary support for the pound ahead of the Bank of England meeting this month. The market expected the EU to compromise with the UK at the last minute, but the news at the weekend suppressed this view. A no-deal Brexit will intensify pressure on the British economy. The epidemic has already dealt a severe blow to the country’s economy, with the number of new cases increasing on Sunday. These have become major negative factors putting pressure on the pound.
Huitong.com recalled that due to news that the Brexit transition negotiations had not moved forward, the pound opened and opened lower on September 7. The Asian market sank again after noon, approaching 1.32. From a technical perspective, the 21-day moving average currently located at 1.3187 has provided support for the uptrend of the exchange rate since the beginning of July. If you hold this point, the pound will maintain an uptrend. If it closes below this point, we will see support from the August range near 1.3000.
（GBP to USDDaily chart)
As of 2:27 p.m. on September 7 Beijing time, the pound was trading at 1.3207 / 09 against the US dollar.
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