Pounds hits two-month high amid hopes of a Brexit breakthrough
The pound has climbed to its highest level in two months amid hopes of a Brexit breakthrough.
Sterling gained as much as 1.1pc against the dollar in morning trading to reach $1.2476. It also rose 1pc against the euro to €1.1262 as fears of recession and a departure from the EU without a deal receded.
There is speculation that a new Brexit deal could be close, with Prime Minister Boris Johnson set to meet European Commission president Jean-Claude Juncker on Monday for talks.
On the up: The latest rise means the pound has rallied more than 3pc since sinking to lows under $1.20 earlier this month
Traders believe that a No Deal exit would damage the economy, meaning the pound tends to fall when it looks more likely.
House of Commons speaker John Bercow is also believed to have boosted sterling with comments that he will do whatever necessary to block No Deal – despite Johnson’s desire to keep it on the table as an option so his negotiating clout is improved.
Lee Hardman, an analyst at MUFG, said: ‘The relief rally for the pound mainly reflects market participants breathing a sigh of relief that imminent No Deal Brexit and recession risks have eased.’
The latest rise means the pound has rallied more than 3pc since sinking to lows under $1.20 earlier this month.
Political chaos over Brexit sent sterling tumbling as Johnson and rebel MPs grappled for supremacy, culminating in the House of Commons passing a law intended to force him to delay Britain’s departure from the EU.
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