Analysis on pound

While the pound remains below 1.3950, it is vulnerable to further downturn, but if it breaks above this important level, it can expect more substantial recovery. Negotiations on the withdrawal of the UK from the EU are not going well, as the parties are still unable to reach an understanding on the single market, the customs union and the border between Ireland and Northern Ireland. Last week, there was no progress, and neither side is going to step back. The next important date for negotiations is March 22, when EU leaders will meet in Brussels to sign an agreement on the beginning of the transition period. They will also discuss the basic principles of conducting further negotiations on a number of issues, including trade.
The British economic data was not bad: activity in the service sector accelerated, judging by the latest index, and although the trade balance deficit has slightly increased, the volume of industrial production fell back at the beginning of the year. As there will be no fresh data in the UK this week, the GBP outlook is entirely dependent on the demand for the euro and US dollar. I expect that EUR/GBP will continue to fall in price.