Sterling Reverses Losses on Report About Breakthrough in Brexit Talks

The Great Britain pound rose sharply today, reversing earlier losses, after the report that Britain and the European Union have reached a major breakthrough in the Brexit negotiations.

The sterling has been vulnerable today, but that changed after the report from the Telegraph that Britain and the EU made an outline deal about the Brexit bill. It looks like the sides achieved an agreement about the amount of money Britain needs to pay for leaving the union. There was not a clear figure, but various numbers were floating around from €40 billion to â‚¬55 billion. It is important to remember that the deal has not been finalized, and everything may be changed yet.

Even with a preliminary divorce bill, a thorny issues of the border between Ireland and the United Kingdom remains. The UK and the EU want to avoid creating a hard border on the island of Ireland, though Ireland would prefer to not have a border at all. That would be hard to achieve, though, as after Britain leaves the single market, which was allowing to avoid having a border, some form of control and checks on the border should be instituted.

GBP/USD traded at 1.3361 as of 20:42 GMT today after opening at 1.3314 and falling to the daily low of 1.3222. EUR/GBP opened at 0.8931, rallied to the daily high of 0.8981, but slid back to trade at 0.8863. GBP/JPY rallied from 147.89 to 148.95, bouncing from the session minimum of 146.95, which was the lowest since October 9.

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