The pound hit a bit of a whipsaw on Barnier's reported comments earlier
Cable fell from 1.2650 to a low of 1.2608 before recovering back to 1.2640 levels and then now at 1.2620-30 as the pound goes for a ride on EU chief Brexit negotiator Barnier's reported remarks that the UK proposals yesterday are still not enough.
Talks will continue again today in Luxembourg and I would expect them to continue all the way through the night once again. It was said that talks lasted through until 11pm local time yesterday so there's your benchmark.
Barnier has said that he would expect an agreement to be struck today, otherwise there wouldn't be enough time to get a Brexit deal across the line at the European Council summit on 17-18 October this week.
As such, all the optimism and hopes now suddenly rests on how talks will progress today. If we don't hear of anything else, I reckon it would be tough for the pound to build up gains again over the coming sessions and for cable to test the 1.27 handle.
In the mean time, be prepared for more Brexit rumour mongering set to follow during the day as reporters and news outlets will try to interpret everything and anything to decipher the mood during today's talks.
