Pound soars to highest level since Brexit vote

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11 Jan, 2018

Pound soars to highest level since Brexit vote

Reports that Spain and the Netherlands are willing to back a soft Brexit deal sent the pound soaring to its highest level against the dollar since the result of the EU referendum in June 2016.

The shock referendum result to leave the European Union back in 2016 sent the pound plummeting and it has been fighting an uphill struggle ever since.

However, with phase one of negotiations now complete and with trade talks in phase two set to begin, the pound has been steadily but surely recovering, although it was still below the levels seen prior to the referendum result.

This all changed when a report from Bloomberg stated two foreign ministers from Spain and the Netherlands had agreed to work together for a divorce deal that would maintain close ties between the EU and Britain.

The news sent the pound up by over one percent on the day to $1.3691, although it remains little changed against the euro at just below 1.13.

“I would suggest this [sterling’s jump] is purely because of news that the Dutch and Spanish are open to a softer Brexit,” Neil Jones, Mizuho’s head of hedge fund currency sales.

Sterling struggled to hold onto the gains falling back to $1.3659 by 1412 GMT but this could potentially be a sign of things to come although some remain sceptical.

“I‘m sceptical this (report) is necessarily a game-changer at this stage as there will also be member states pushing the other way,” said Nomura currency strategist Jordan Rochester.

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