Negotiations around the contentious issue of the Irish border resumed on Thursday, with some reports suggesting a draft agreement had been reached.
European Commission chief spokesperson Margaritas Schinas gave Britain a new deadline of midnight on Sunday to present a new Brexit divorce plan, adding that Commission President Jean-Claude Juncker was optimistic a deal could be made.
Sterling held relatively firm versus most of the majors, with most traders quietly confident that the UK government would be able to unlock future trade talks before the end of the year.
On Friday morning it was reported that a deal had been agreed following overnight talks about the Irish border. The PM announced that the Good Friday Agreement would be upheld and that there would be no hard border.
The path is now clear for the UK to proceed with talks on the UK’s future relationship with the EU.
Pound to Euro (GBP/EUR) Exchange Rate Drifts Higher 50 Pips
The Pound to Euro exchange rate ticked higher by around half a cent on Thursday, as markets reacted to rumours of a new draft Irish border agreement.
In the currency bloc it was reported that economic activity expanded 0.6% in the third quarter, equating to annualised growth of 2.6%, which was slightly higher than analysts’ predictions of 2.5% but failed to lift the single currency. Friday UK trade, manufacturing and industrial data was released. While the trade deficit is expected at around -£11.5 billion for October, manufacturing production is tipped to have accelerated from 2.7% to 3.8%, which could give Sterling a mild boost.
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