Pound Lifted by Agreement Promise
The Pound rallied against the US Dollar by more than 1% after one official from the British government said that they were very close to signing off on an agreement which would provide financial services companies in the UK basic access to the E.U. Marketplace. Concern over how the government could finance its deficit had been a major concern for financial market players and this news provided a solid lift for Sterling bulls. The financial services market plays a significant role in the economy in Britain.
As reported at 11:41 am (BST) in London, the GBP/USD was trading higher at $1.29, a gain of 0.84% and off the session peak of $1.2920; the low for the trading day was recorded at $1.2765. The EUR/GBP was trading at 0.88358 Pence, down 0.25%; the pair has ranged from a low of 0.88054 Pence to a high of 0.88635 Pence.
Strategist Calls for Caution
Market player's concern for the UK's current account deficit is because it is one of the highest among its peers at almost 4% of the country's GDP. Today's gains follow yesterday's support for the Pound after the Brexit minister said he believed a deal would be thrashed out by November 21. Though Dominic Raab offered up a specific date, the government did come back to state that no exact time frame for an agreement had been set. One currency strategist in London also expressed wariness, noting that the Parliament must ratify any agreement first and with that uncertainty it's too soon to celebrate.