Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Pound surges as hopes of Brexit deal rise

Pound surges as hopes of Brexit deal rise

Sharpest rise in sterling’s value since EU referendum follows Boris Johnson-Leo Varadkar meeting
The pound had its biggest two-day rally against the dollar since the Brexit vote as hopes rose that a deal could be struck before the deadline later this month.

Sterling climbed to the highest level in three months against the US currency, briefly hitting $1.27, amid mounting optimism in the City, after the EU’s chief negotiator, Michel Barnier, said talks could progress to the next phase.

The pound has risen four cents against the dollar since Thursday, when Boris Johnson and the Irish taoiseach, Leo Varadkar, agreed there was a “pathway to a possible Brexit deal”. That is the sharpest two-day rise in the pound since the EU referendum more than three years ago.

While several pitfalls remain, the pound also hit a near five-month high against the euro of €1.1465.

Oliver Harvey, an analyst at Deutsche Bank, said: “We cannot recall a time during the Brexit process of the last year at which the Irish government raised expectations to this extent.”

The surge in the pound on Friday pushed it back above $1.26 for the first time since Boris Johnson became leader of the Conservative party.

Dean Turner, economist at the Swiss bank UBS, said a Brexit extension and general election was still probably the most likely outcome. He said the pound would trade between $1.25-$1.29 under such a scenario, but could soar to $1.35 if an eleventh-hour deal was struck, or tumble should talks break down.


“The news will have cheered sterling investors, but we recommend they remain nimble with much still uncertain as the sand in the Brexit hourglass continues to run down,” he said.

The pound still remains heavily down from its level before the Brexit vote, by around 15%, in a reflection of the lingering risks posed by leaving the EU and the broader weakness in the UK and global economy.

Shares in UK-focused companies also surged on Friday, on hopes that a disorderly Brexit could be avoided.

Bank shares led the rally, with Lloyds Banking Group jumping 12% and Royal Bank of Scotland up 11.4%. Housebuilders also posted sizeable gains, with Persimmon closing 10.8% higher. Holiday firm Tui, high street chain Next and DIY chain Kingfisher all closed around 9% higher.

“The optimism surrounding Brexit has given British banks a boost as UK government bond yields have ticked up, bank’s lending margins usually improve in an environment of higher bond yields, hence why RBS, Lloyds, Barclays and HSBS are higher today,” explained David Madden of CMC markets.

“The fear of a disorderly Brexit has been hanging over the property sector,” he added.

The domestically focused FTSE index, which contains many medium-sized UK firms, surged by 4.2% on Friday, its biggest one-day jump since May 2010.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
The Country That Got Too Rich? Public Spending Dominates Norway Election
EU Proposes Phasing Out Russian Oil and Gas by End of 2027 to End Energy Dependence
More Than 150,000 Followers for a Fictional Character: The New Influencers Are AI Creations
EU Prepares for War
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
×