FXStreet reports that according to economists at MUFG Bank, GBP/USD will struggle to surpass the 1.3500 mark even if a Brexit deal is reached.

“The trigger for the pound reversal were reports that the EU and UK are moving towards a compromise on fisheries in an attempt to unblock a Brexit trade deal.”

“We continue to believe that a last-minute trade deal will be reached but the risk of a no-deal is now elevated with time fast running out to reach compromises.”

“Even if a trade is reached, upside potential for the pound will now be dampened by recent negative COVID-19 developments in the UK. According to the BBC, more than 40 countries have banned UK arrivals, and France has shut its border with the UK for 48 hours. The EU is expected to announce a coordinated response today. In lights of these developments, GBP/USD will find it more of a struggle to rise beyond the 1.3500-level if a deal is reached before year-end.”