British pound pushes higher on Irish border development

Forex news

The British pound drove higher Monday, following news discussions surrounding the Irish border issue appears to have been settled.

The British pound drove higher Monday, following news discussions surrounding the Irish border issue appear to have been settled.

News reports and official comments suggest it’s likely that all parts of Ireland will continue to follow EU law, in order to avoid a hard border between Ireland and Northern Ireland, post Brexit.

The important detail, which should mean Brexit negotiations can move to the next phase this week, supported sterling. By 1400 BST, the British pound was trading at $1.3524, up from 1.3454 at the UK market open.

Irish border issue agreed?

No official confirmation has come from Downing street on the matter, as UK Prime Minister Theresa May attends a meeting with European Commission President, Jean-Claude Juncker.

However, tweets from European member of Parliament Phillippe Lamberts and EU summit chair Donald Tusk, were both positive on the situation, earlier Monday.

 “Tell me why I like Mondays!,” Tusk tweeted. “Encouraged after my phone call with Taoiseach (Leo Varadkar) on progress on #Brexit issue of Ireland. Getting closer to sufficient progress at December Summit.”

Meanwhile, Lamberts was a little more detailed.

“It seems the British government is now coming to terms with reality and is finally willing to make the necessary concessions to allow us to move on to stage two of the negotiations,” Lamberts tweeted in series of three posts.

“While the hard-line Brexiteers will not be happy, the necessity of a special agreement for NI has been clear to all rational observers since day one. Maintaining regulatory alignment between NI and Republic of Ireland is the only solution if the GFA is to be respected,” he said.

Comfort from key phrase

Including the phrase, ‘regulatory alignment’ in the agreement, is reported to be a key one, from the Irish leadership perspective.

While the UK is still intent on securing a strong trade deal between itself and the EU, this latest detail suggests Northern Ireland could maintain its current trade agreement as part of the EU.

Regardless of what the eventual reality of this detail will be, it’s considered a big step forward and should open the doors to the next, important phase of Brexit talks.

As of 14:11 GMT, Monday, 04 December, GBP/USD share price is 1.3117.