Pound pushes higher as deal seems close on key UK financial services sector

Nov 1, 2018

The Pound has benefitted from further good news regarding Brexit negotiations today.

Yesterday afternoon’s sterling rally was short-lived, however, reports overnight pointed towards there being a potential deal agreed over the UK’s key financial services sector. This deal would allow UK-based financial services firms access to the UK markets. The full details are yet to be released but this has obviously been applauded by investors as it was a real concern for the post-Brexit economy.

In other news, the Bank of England have voted unanimously to keep interest rates on hold but they’ve implied that interest rates will rise slightly faster than current expectations should the UK avoid a hard Brexit. Their general tone was slightly more optimistic than expected which has further bolstered the appeal of the Pound today.

As a result, the GBP/USD has boosted around 2-cents from yesterday evening. The GBP/EUR is also now close to a 2-week high having risen over a cent from yesterday evening.

The last 24-hrs have been a clear demonstration of how volatile the Pound is and how its fate is resting on Brexit news. Traders have priced in a lot of the negativity over the past couple of weeks, so any good news is creating more exaggerated positive movements.