Confirmed Brexit breakthrough boosts British pound

Confirmed Brexit breakthrough boosts British pound

The British pound moved higher Friday, following news an agreement has been struck over the Irish border issue, paving the way for Brexit negotiations to finally move forward to the next phase.

Sterling was buoyed earlier in the week on news an agreement had been made. However, the Northern Irish DUP party opposed the details, sending the pound lower. Friday’s news has been confirmed by both European Commission President Jean-Claude Juncker and UK PM Theresa May.

By 1030 GMT, the British pound was trading at $1.4373. While that’s down from highs of $1.500 it briefly touched a little earlier, it’s over a cent higher from the $1.3332 it hit overnight Wednesday.

Agreement details

The details reported so far, suggest Brexit negotiations to-date, have achieved the following agreements:

  • A guarantee there will be "no hard border" between Northern Ireland and the Republic, to help maintain the "constitutional and economic integrity of the United Kingdom".
  • Protection of rights to live, work and study for EU citizens living in the UK and vice versa.
  • A total financial settlement considered "fair to the British taxpayer".

Leaders seem positive

Speaking earlier this morning after all-night talks, Juncker appeared cautiously positive at the breakthrough.

“Prime Minister May has assured me that it has the backing of the UK government,” Juncker said at a press conference following the talks. “On that basis, I believe we have now made the breakthrough we need. Today’s result is of course a compromise.”

PM May, meanwhile, said she expected the agreement to be formalised next week.

“I also look forward to next week’s European Council meeting, where I hope and expect we will be able to get the endorsement of the 27 (member countries) to what is a hard-won agreement in all our interests,” she told her audience.

But, the DUP expressed a touch of scepticism at the agreement.

“We believe there is still more work to be done to improve the paper (agreement document),” DUP leader Arlene Foster said in a statement. “We do however welcome the assurance given by the Prime Minister and Brexit Secretary in Parliament that any alignment will be done on a UK wide basis.”

By Ilona Billington
Ilona is a freelance writer and editor with over 15 years experience reporting and writing about UK and European economics, real estate, financial markets and central banks.

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