European Union would not be rushed in negotiations with Britain

Irish foreign minister, Simon Coveney, was speaking to the BBC today and said the European Union would not be rushed in negotiations with Britain to thrash out their post-Brexit relationship.

"The European Union will approach this on the basis of getting the best deal possible - a fair and balanced deal to ensure that the UK and the EU can interact as friends in the future - but the EU will not be rushed on this," he told the BBC.

FX Implications

We are all quiet on the Brexit front, which could be regarded the quiet before the storm. Considering the timeline for which PM Boris Johnson is set for negotiations, headlines such as this underpins the notion that a year is not going to be sufficient enough and raises the implications of a hard Brexit again - GBP negative.

Assuming the European Parliament also gives the green light, the UK will formally leave the EU on 31 January with a withdrawal deal. However, this would only mark the next step in the Brexit process. Following its departure, the UK will enter a transition period until 31 December 2020.

During this period, GBP is likely to be up against it. Headlines will dominate GBP flow and positioning while the Bank of England will have a tough time seeing the clearing through th trees should negotiations fall by the wayside. If a trade deal is ready in time, the UK's new relationship with the EU can begin immediately after the transition. If not, the UK faces the prospect of having to trade with no agreement in force and be heavily bearish for the pound.

MP Johnson has also ruled out any form of an extension to the transition period, so the clock is already ticking.

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