Pound soars against the dollar and euro ahead of historic Brexit deal

THE pound has risen against the US dollar and euro as the UK and the EU are on the brink of a Brexit trade deal. The Prime Minister is expected to address the nation this morning following overnight negotiations to iron out the crucial fishing deadlock. The pound was up by nearly two cents versus […]

THE pound has risen against the US dollar and euro as the UK and the EU are on the brink of a Brexit trade deal.

The Prime Minister is expected to address the nation this morning following overnight negotiations to iron out the crucial fishing deadlock.

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The pound was up by nearly two cents versus the US dollar at just over $1.35 at 8am this morning, compared to yesterday.

It has also climbed a cent versus the euro to just above €1.11.

Sterling was pummelled earlier this week as countries around the world imposed travel bans against the UK over fears a mutant strain of coronavirus.

Imposing tougher Covid restrictions on London and parts of the South East of England over the weekend also played a part.

On Monday, sterling plummeted to $1.32 against the US dollar and €1.08 against the euro after Christmas was cancelled for millions.

On December 17, the pound peaked at $1.35 and €1.11.

The FTSE 100 is also up when they opened this morning, rising by 20 points to 6,516 – up 0.3%.

MUG strategist Lee Hardman, said yesterday: “The market is anticipating that a deal will be agreed in the next day or two,” adding that sterling could strengthen to $1.36/$1.37, Sky News reports.

He said, however, that traders would be keen to see details of any agreement, given that any specifics of a deal will likely only be thrashed out in 2021.

He added: “The best case scenario for the pound would be if we also see details released from the EU and UK side of things alongside the deal to try and reduce the initial disruption when we shift to a new trading arrangement.”

Officials on both sides are hopeful a deal could be announced as early as this morning, as talks over a fisheries compromise gathered pace.

EU officials have told member states to prepare for a meeting this morning if a deal is signed off – boosting hopes of an agreement within hours.

One UK source said last night: “No white smoke just yet but they turned up with matches today.”

Another source added: “We’re not far off”.

Eurasia Group managing director Mujtaba Rahman told clients: “On process, the commission is very keen to strike a deal by tomorrow evening at the latest, as it fears it will otherwise be difficult to even provisionally apply a deal for January 1.”

But British retailers remain less certain of their future.

Helen Dickinson, chief executive of the British Retail Consortium said: “The light at the end of the tunnel seems further than ever and many retailers – who are losing billions in sales with each passing week – will struggle under the new wave of closures.”

She added: “The industry would rather trade its way to recovery, but this has now been curtailed by the extended Tier 4 restrictions.

“The time for debating future business rates relief is over, it is now an imperative.

“The Government must announce targeted relief beyond April for those retailers who are suffering under the impact of repeated closures, or else be prepared for further shop closures and job losses in the New Year.”