Ireland’s Prime Minister Says, “There Is Hope For A Brexit Deal”
The latest announcements of Thursday have finally incited positivity regarding Brexit in the financial markets. The uncertainty linked to Brexit has kept the two major currencies, Pound Sterling (GBP) and Euro (EUR) under pressure in the past few weeks. For the first time since the start of Brexit in 2017, Mr. Leo Varadkar, the current Prime Minister of Ireland, was reported stating on Thursday that the negotiations between European Union (EU) and the United Kingdom (UK) are gradually moving towards settlement.
Prime Minister Boris Johnson Is Also Hopeful Of A Brexit Deal
Mr. Varadkar has expressed his positivity for a Brexit deal by the end of the month (October). This will make the removal of the UK from the EU more orderly. Considering the role of Ireland in stretching the Brexit impasse, such comments from the Prime Minister stirred up the positivity in the financial markets which responded accordingly. The claims of optimism regarding an expected Brexit deal were supported by Mr. Boris Johnson as well, in his capacity as the current Prime Minister of the UK.
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Immediately following the comments, GBP was seen rallying up in the Forex market. Currently trading at 1.2461 against the U.S Dollar, Sterling made a high of 1.2469 on Thursday that marks a daily gain of just above 2%. Not only was it the greatest daily gain in percentage for the currency in the past seven months, but it was also reported to be the two-week high for GBP/USD.
The optimism revolving Brexit has also helped Euro in gaining strength in the Forex market. While it dropped against the Sterling (a high of 0.8831 for EUR/GBP), it managed to make a significant move against the USD. The U.S trading session on Thursday saw the European currency making a high of 1.1034. This has been the highest target hit by EUR/USD in a streak of 3 weeks that has kept the pair under pressure.
As a response, the USD index highlighted a significant drop to 98.709, the lowest it has been since September 25th, 2019.
Next Few Days To Determine GBP’s Fate
Considering that the figures for GDP and manufacturing production were revealed to be lower than expected earlier in the day (Thursday), the major hike in GBP was rather impressive and supported the claims that Brexit is currently acting as a standalone macro event of financial importance that is directing the Pound’s movement in the Forex market.
According to the financial experts, the recent announcements, however, are only the start with a lot of ground to cover in the upcoming week. The next few days, therefore, are going to be defining the fate of GBP and a clearer trend can be expected to emerge.