EU chief Brexit negotiator, Michel Barnier, tweets
Full & effective implementation of Withdrawal Agreement will always be an absolute priority for EU It is the result of long EU-UK negotiations & the only way to protect Good Friday (Belfast) Agreement, guaranteeing peace and stability on island of Ireland.
#InternalMarketBill
Nothing new here given the move by the EU earlier. The one-month deadline means that there might not be any near-term consequences as a result of the legal action, with the UK also having to sort through the internal market bill at the House of Lords for now.
Just be reminded that while the bill has passed the Commons, it isn't a guarantee to be passed at the Lords since Johnson doesn't command a majority there.
Negotiations this week look to be going nowhere and the pound reaction basically just highlights the negative tensions and nervousness associated. But a lot can still happen in two weeks so let's see how things play out from here.
But either way, the outlook for the pound may not be too favourable moving forward. If the internal market bill, at its current state, fails to pass the Lords, it could lead to more political turmoil in the UK and there's no certainty on what that will look like as well.
At this stage, I reckon only some form of compromise or willingness to agree could set the stage for the pound to chase a significant move higher.
