Amidst the last-ditch talks held between the UK and France to resolve the dispute over the fishing licenses and checks, French President Emmanuel Macron, who will meet the UK Prime Minister Johnson at the G20 meeting in Rome on Sunday, said the row was “a test” of the UK’s “credibility”, in a Financial Times (FT) interview.

On the other hand, PM Johnson urged the British fishermen to “be confident about going about their lawful business” as he promised action against any infringements on their right to fish.

Meanwhile, the head of the French ports of Calais and Boulogne, Jean-Marc Puissesseau warned, “It will be a drama, it will be a disaster. It will be chaos in your country because the trucks will not cross, it will be chaos at the ports. It has reached a ridiculous point, I would say.”

FX implications

Amid renewed Brexit concerns and pre-BOE caution trading, a potential recovery in GBP/USD from Friday’s massive sell-off is likely to remain shallow.

The cable tumbled 0.80% on the day to hit two-week lows of 1.3668 last Friday, settling the week at 1.3678. The steep drop could be attributed to the month-end flows into the US dollar, lifting the buck from four-week troughs.

Read: GBP/USD Weekly Forecast: Duo of central banks and Nonfarm Payrolls promise wild action