The pound rallied on Thursday following the agreement on a draft political declaration about the UK’s future relationship with the European Union.
By Maryam Cockar, Press Association City Reporter
November 22 2018 5:36 PM
The pound rallied on Thursday following the agreement on a draft political declaration about the UK’s future relationship with the European Union.
European Council president Donald Tusk said the draft has “been agreed at negotiators’ level and agreed in principle at political level, subject to the endorsement” of leaders of the EU.
This paves the way for a special Brexit summit to go ahead in Brussels on Sunday, when leaders of the 27 remaining EU states are expected to approve the declaration and the 585-page withdrawal agreement setting out the terms of the UK’s departure from the bloc.
The pound was up 0.72% to 1.286 US dollars, having hit 1.292 earlier in the session.
Sterling was also up against the euro, rising 0.56% to 1.128.
David Madden, market analyst at CMC Markets, said some of the pound’s gains were handed back as traders started to wonder how likely the Brexit deal will get passed in Parliament.
“The agreement appears to [be] pro-business, which is why we are seeing an upward move in the pound,” he said.
“Given that there would be deep cooperation between the UK and the EU post-Brexit, the deal might not get approval in London.”
Meanwhile, the FTSE 100 was hit by the strong pound as many of the companies on the blue-chip index make the bulk of their money overseas.
The FTSE 100 index closed 89.91 points, or 1.28%, lower at 6,960.32.
The French Cac was down 0.75%, while the German Dax fell 0.94%.
In corporate news, British Gas owner Centrica closed down 13.45p, or 9.2%, to 132.3p after it warned over a hit of around £70 million from the incoming energy price cap as it revealed another 370,000 customers have quit the supplier.
