We have seen the Pound recover nicely today, rising by more than 1% against the Euro and US Dollar. Yesterday the Pound had a very poor start to the week, with GBPEUR dropping below €1.10.
What has caused the Pound to rise today?
It won’t come as a surprise that it’s Brexit that has caused today’s gain, much as it was the reason for yesterday’s fall. On Tuesday the markets didn’t like comments from Theresa May about leaving with no deal. Investors duly sold the Pound, causing it to weaken significantly. Today the tide has turned however, and we’ve heard rumours that the EU are finally willing to make some concessions. The EU’s chief negotiator is said to have made comments saying that a unique partnership will be formed.
I’ve also read that other high-ranking EU officials have said that an ambitious and close relationship between the UK and EU can be achieved. It’s nice to hear some positivity surrounding Brexit, and the markets have certainly seemed to like it. The Pound has risen by just over 1% against the Euro and US Dollar.
What this shows, is how susceptible Sterling exchange rates are to any small developments with regards to our departure from the EU. As today has shown, and positive news sends the Pound higher. Any news that indicates the UK may leave with no deal, sends the Pound lower. Expect more of the same in the coming weeks as negotiations progress.
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