EUR/USD is subdued in the Tuesday session. Currently, the pair is trading at 1.1320, down 0.07% on the day. On the release front, the U.S. releases CB Consumer Confidence, which is forecast to dip to 136.2 points.
Brexit was on the minds of the markets on the weekend, as the 27 EU leaders approved the withdrawal agreement as well as the political declaration on economic relations between Britain and the EU after Brexit. The European leaders were in a surly mood, taking pains to warn Britain not to try to squeeze more concessions out of the EU. Dutch Prime Minister Mark Rutte summed up the European position, declaring “there is no Plan B”. The EU has signaled that the deal signed on Sunday is “take it or leave it” – if the U.K. doesn’t sign on, the result will be a no-deal “brutal Brexit”, which could be catastrophic for the British economy.
Prime Minister May joined the EU summit on Sunday and again urged British lawmakers to approve the deal, saying it met most of Britain’s demands. Still, May will have an uphill battle pushing the deal through parliament, with the Labor party set to torpedo the agreement, and many Conservative MPs unhappy about the U.K. remaining in a customs union with the continent. As well, the DUP is concerned that the agreement, which keeps Northern Ireland in a customs union with Ireland, weakens the link between Northern Ireland and the rest of the United Kingdom. The stakes are high for Theresa May – if she can’t shepherd the deal through parliament, there will be calls for her resignation, which could lead to early elections in the U.K.
