Citywire for Financial Professionals
Stay connected:

View the article online at http://citywire.co.uk/money/article/a1058917

Pound bounces back on Brexit transition hopes

Pound rallies on report EU may offer transition deal. Plus, our Accumulator table tells the story of the week in markets.

 
Pound bounces back on Brexit transition hopes
 

The pound has recovered from yesterday's lows on hopes the European Union will offer the UK a two-year transition deal in Brexit talks.

Sterling yesterday fell sharply after the EU's negotiator Michel Barnier said that talks over the UK's divorce bill had reached 'deadlock'.

But it quickly bounced back after German newspaper Handelsblatt reported that Barnier may still offer the UK a two-year transition deal.

After falling as low as $1.313 against the dollar yesterday, sterling ended the day higher, the pound surged to $1.329 after the UK market closed on the transition deal report. 

Having reached as high as $1.332 this morning, the currency has now fallen back to trade at $1.326.

The pound's resurgence knocked the FTSE 100 from its all-time high hit yesterday, with the index falling 15 points to 7,541 in the morning's trading.

A stronger pound tends to hurt the index as its members rely on overseas markets for around three-quarters of their earnings.

'Next week's European Council meeting will be an important turning point for talks,' said Oliver Harvey, macro strategist at Deutsche Bank.

'Secretary [David] Davis [yesterday] reiterated May's appeal to EU27 leaders to revise their mandate for Barnier to be able to move talks onto transition in parallel with divorce,' he said.

'It also remains to be seen whether prime minister May can accept anything less than a full political commitment to a transitional deal from the EU27 in order to settle divorce issues.

'If neither of the above can be resolved, the likelihood of progress being reached by the December European Council meeting would decrease.'

With the pound see-sawing this week, markets have delivered decent returns for UK investors, as our exculsive Accumualtor data table shows.

You can access the Accumulator here. 

1 comment so far. Why not have your say?

colin overton

Oct 14, 2017 at 11:20

Shame.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire Guide to Investment Trusts


In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.

Watch Now

More about this:

More from us

What others are saying

Archive

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add noreply@emails.citywire.co.uk to your safe senders list so we don't get junked.

Read more...

Accumulator: oil and emerging markets lead the way

by Daniel Grote on Nov 24, 2017 at 17:01

Sorry, this link is not
quite ready yet