Today the pound is receding against both the dollar and the euro, after climbing to a five-month high on Tuesday when it touched $1.28. Obviously Brexit and the ongoing negotiations between the UK and the EU are behind the pound’s recent gains, which surged as reports started to emerge of Boris Johnson being on the verge of reaching an exit deal with the EU, having reportedly made concessions on the issue of the Irish border.
Photo by Luke Stackpoole.
But any agreement reached with Brussels will have to be ratified by the British Parliament, and it is not yet clear if the Democratic Unionist Party, whose vote would be essential, is willing to support it. Perhaps this why the pound lost some steam after yesterday’s gains. Even though a no-deal Brexit appears less likely, there is still a long way to go before the markets start to fully price in the ideal outcome for Sterling, which would be a negotiated Brexit.
