Sterling got its swagger on overnight, with a report from The Sun of all places only increasing the currency’s optimism that the UK will duck a no-deal Brexit.
That illustrious news source claimed that the DUP, previously opposed to Theresa May’s Brexit deal, will now support the PM’s ‘Plan B’ during next Tuesday’s Commons vote, the party’s 10 MPs begrudgingly shifting their red line from no Irish backstop to a backstop with a specific time limit. This as Arlene Foster and her fellow MPs try and avoid the potential of a softer Brexit if May’s plans flop once again.
The pound was very, very pleased with this progress, soaring higher against the dollar on Thursday before adding another 0.3% after the bell on Friday, leaving cable at $1.309, its best price since early November. Against the euro it was a similar story; though it has started the morning fairly flat, Thursday’s surge has sterling at €1.155 and eyeing €1.16, a level it last substantially crossed 8 months ago.
Filtering through to the European indices, the DAX and CAC were overjoyed with the euro’s losses; the German index climbed 130 points to hit 11250, while its French counterpoint was up 0.7% and back above 4900. The FTSE, obviously, was less enthused about sterling’s gains, though a commodity rebound prevented it from sliding into the red, the UK index instead adding 0.1%.
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