According to the Telegraph, the UK and EU are reportedly closing in on an agreement to protect medical supplies being sent to Northern Ireland, which would mark their first deal in talks over the Northern Ireland protocol, breaking recent deadlock. The Telegraph also reported that the EU had backed down from threats to retaliate against the UK over Article 16.
UK Brexit Minister Lord David Frost and his EU counterpart Maros Sefcovic are scheduled to meet for talks on Friday. Sefcovic had in the past said getting a deal on medicines was “low hanging fruit” that could create momentum for broader talks.
GBP/USD has recently pushed to session highs in the 1.3490s and the positive news on the Brexit front, which will embolden hopes for a deal before the year’s end, may push the cross above 1.3500. GBP has been broadly underpinned on Wednesday by hotter than expected UK inflation data.