Sterling rallies on Brexit breakthrough
Sterling has rallied to reach multi year highs against a number of currencies with notable moves being seen against the US dollar, Euro and Australian Dollar.
Moves were seen following news that the UK and the EU have made significant steps and agreed on a “large part” of the Brexit agreement that will lead to the “orderly withdrawal” of the UK. This was a significant move with Brexit Negotiators Michel Barnier and David Davis describing it as a “decisive step”. The transitional period is set to last from 29 March, 2019 to December 2020, and is intended to smooth the path to a future permanent relationship.
As a result sterling has strengthened throughout much of the day with notable moves through 1.40 for GBP/USD and 1.14 GBP/EUR. Another significant movement was seen against the Australian Dollar with the pound reaching a post-Brexit high of 1.8280 having rallied over 3.5% in less than a week.
For those looking at the Euro, a word of warning, this is now the fifth time the pound has breached 1.14 since October 2017. On the five previous occasions a breach of 1.14 has been seen, the pound has corrected quite sharply. There is no guarantee this trend will continue but with such a sharp rally for the pound today we could easily see another short term dip. If you need to make a transfer in the coming weeks, get in touch with your account manager to take advantage of this recent rally.
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