The dollar was edging up against its main rivals Thursday, advancing versus the British pound as analysts sounded more skeptical about an olive branch offered by the European Union’s top Brexit negotiator.
EU negotiator Michel Barnier said Wednesday the trade bloc was willing to offer the U.K. an unprecedented partnership, delivering a big boost to the pound for that session.
His comments have helped ease concerns about the potential for a “no-deal Brexit,” meaning a disorderly departure from the EU by the U.K., without an agreement on future trade relations.
But some analysts on Thursday were not exactly breaking out the champagne.
“There is unlikely to be a perfect deal which will satisfy both the EU member states and U.K. parliament,” said Josh Mahony, a market analyst at IG, in a note.
Watch the Friday meeting
A meeting slated for Friday between Barnier and U.K. Brexit Secretary Dominic Raab “will ensure significant volatility for the pound as we close out the week,” Mahony added. “There is a strong chance that the bullish optimism seen over the past 24 hours will be washed away, if talks continue to hit the same roadblocks.”
Read more: Gear up for a no-deal Brexit: 5 areas investors should watch
And see: A top London startup’s CEO flags the biggest Brexit threat to his industry
‘We have heard this kind of language in the past’
Barnier’s “softer language will be a positive but A) There is yet scepticism about what it all means with few details on any of this; and B) We have heard this kind of language in the past,” said Neil Wilson, chief market analyst for Markets.com, in a note.
Sterling GBPUSD, -0.1382% bought $1.3013, down a bit from $1.3028 late Wednesday in New York.
The ICE U.S. Dollar Index DXY, +0.08% rose to 94.651, up slightly from 94.569.
The euro EURUSD, -0.1367% last traded at $116.94, down slightly from $1.1709 late Wednesday, while the dollar USDJPY, -0.12% bought 111.58 yen vs. 111.68 yen.
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