The pound has lifted against the euro and the US dollar following an early morning announcement that Brexit negotiations would continue to their second phase.
Following overnight gains that brought the currency to as high as $1.35 against the dollar, sterling immediately slipped after the Brexit breakthrough. It has since risen back to $1.3487.
Against the euro, the pound was up by 0.32 percent to €1.1482.
A financial analyst at SpreadEx, Connor Campbell, stated: “After a week of Brexit blunders, news that the UK and EU have made ‘sufficient progress’ in their phase one negotiations – crucially including a DUP-pleasing deal to avoid a hard Irish border but with no ‘special status’ for Northern Ireland – sent sterling higher this Friday.
“Though inarguably pretty damn healthy, this early growth does suggest a level of reticence from investors, who appear to be taking on board Donald Tusk’s warning that the real hard part – i.e. the forging of a new relationship between the UK and EU – is still to come.
“Predictably the FTSE got little out of all this, with the UK index wilting in the face of the pound’s push. It is perhaps a sign of the swell of positivity, however, that the FTSE managed to avoid tipping into the red; instead, the index opened effectively flat at 7320, at the lower end of its recent trading.”
The Monex Europe’s head of market analysis, Ranko Berich, stated: “The Brussels fudge that May and Juncker have served up this morning has gone down a treat for sterling. The pound is trading up against almost all major partners, and has reached a six month high against the euro.”
However, Berich added that the move appeared like a “classic Eurozone can-kicking exercise.”
On December 8, Jean-Claude Juncker confirmed that Brexit talks could already move onto the second phase of negotiations, meaning that post-Brexit trade talks will finally be on the table