UK: Sterling Extends Gains Amid Optimism On Brexit Deal

  • Date: 25-Dec-2020
  • Source: Al Bawaba
  • Sector:Economy
  • Country:Middle East
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UK: Sterling Extends Gains Amid Optimism On Brexit Deal

Sterling extended gains on Thursday amid expectations a long-elusive Brexit deal was imminent, raising hopes the UK can avoid a turbulent economic rupture on New Year's Day.

The dollar was on the back foot in holiday-thinned trading as hopes for an agreement that would protect some $1 trillion in annual cross-channel trade from tariffs and quotas sapped demand for the safest assets, according to Reuters.

The British pound strengthened 0.4% to $1.3546 in Asian hours after surging 0.9% in the previous session to snap a three-day losing streak.

The dollar index was at 90.233 following Wednesday's 0.3% slide. The euro strengthened 0.1% to $1.22030, adding to a 0.2% gain overnight.

While there has been no official confirmation from either side that the months of negotiations had reached a conclusion, a senior British government source said Prime Minister Boris Johnson was poised to do a trade deal with the EU, after media reports said the agreement had already been done.

A source at the EU's executive Commission said talks were still under way, and another British government source was also cautious, saying negotiations were ongoing.

“This time it really does appear that a deal will be struck just in time for Christmas,” Westpac macro strategist Tim Riddell