News of Customs Arrangement Lifts Pound

The Pound Sterling moved higher against the US Dollar after a report in the UK Sunday Times said that the British government was close to striking a Brexit deal, which would include a customs arrangement for all UK borders. Given the March 29, 2019 deadline as the official date by which Britain leaves the European Union, investors were more than anxious that there was no advancements on the customs front over these past several months, which weighed heavily on the Pound which has suffered a loss of about 3.6% against the greenback. The latest news pushed Sterling to 10-day peak against the Dollar but it also strengthened against the Euro.

As reported at 11:32 am (GMT) in London, the GBP/USD was trading at $1.30, a gain of 0.26% and off the session peak of $1.3061; the low was recorded at $1.2970. The EUR/GBP was trading at 0.87416 Pence, down 0.41%; the pair has ranged from a low of 0.87340 Pence to a peak of 0.87740 Pence.

Optimism Should be Guarded

The Pound is also getting support from last week's Bank of England policy meeting. The Monetary Policy Committee indicated that it would consider a more normalizing policy, in other words, moving toward a higher interest rate environment, provided that the UK government had a deal in place with the EU which ensured a smooth transition. Analysts point out that investor optimism should be guarded, however, given that the UK Parliament still needs to approve the proposals.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.