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GBP Weakens As Traders Prepare For Coming Volatility

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The pound swung between gains and losses against the buck Thursday as traders mulled headlines that are differing suggest little progress on the U.K. and EU breaking the deadlock in Brexit talks.

GBP/USD fell 0.28% to $1.2891, though had been as high as 1.2979 and as low as $1.2820.

The U.K. and EU continued talks in Brussels to iron out key problems holding up the post-Brexit that is potential, but differing reports of progress suggest both sides remain wide apart on reaching a consensus.

Reuters reported, citing an EU official, that were no signs of a “landing zone” on key sticking issues, including fisheries and the level playing field in the trade negotiations that are latest using the U.K.

That cooled optimism from an earlier Financial Times report, citing unnamed sources, that the landing zone on state aid happens to be identified but “fishing is the final sticking point.”

The U.K. has made it is cleared by it is unlikely to cave in on demands to take control over access to its waters and fish when the Brexit transition period ends, rather than stick with the EU’s Common Fisheries Policy, which set fishing quotas among EU user states. “So now, we’re going to be absolutely magnificent with the EU …. if you are maybe not likely to talk turkey with us, that’s fine. We can leave, we can say that’s it, no negotiated outcome. We’re ready, come what may,” Cabinet Office Minister Michael Gove stated.

The round that is latest of trade talks kicked off against a souring backdrop after the EU followed up on its threat to take legal action against the U.K. after it didn’t scrap its internal market bill that undermines the withdrawal agreement.

Pressure on negotiators to break the stalemate is building ahead of the summit that is European mid-October, when EU negotiator Michel Barnier is slated to produce the EU with an update on Brexit negotiations. The pound swung between gains and losses against the dollar.

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