Pound pops off lows as details emerge over draft deal of future EU-UK ties
The Pound has just moved off it’s recent lows as further Brexit deal details emerge.
Bloomberg has just reported that the EU and UK negotiators have agreed on a draft text on future ties post-Brexit. Generally, this draft agreement points towards a softer Brexit, emphasising a close future trading relationship and commitment to deep customs cooperation which is seen as Pound positive. It also states their determination to replace the Irish border backstop arrangement in the future.
Most of this shouldn’t be much of a surprise, however, the commitment to a customs territory is unlikely to go down too well with the Eurosceptics. Theresa May has called the Cabinet together as this text is likely to ruffle a few feathers and won’t have satisfied many that were expecting further detail and a stronger UK position. After a string of resignations over the past couple of weeks, she will be hoping this doesn’t cause any further Cabinet members to lose patience with her deal.
The EU are expected to vote on the deal this Sunday and it’s expected to be approved by all 27-member states. Theresa May will then need to try and get the deal through UK parliament (voted expected around 10th Dec) which is likely to be a major challenge.
As a result, the Pound has pushed 1-cent higher against both the Euro and the USD and is trading at the best levels in a week.