British pound CLIMBS to highest since late November – 'HIGHLY reactive to Brexit'

The British pound climbed to its highest since late November on Friday, amid speculation of a Brexit delay. Lukman Otunuga, research analyst at FXTM, wrote: “Sterling’s aggressive appreciation following the report continues to highlight how the currency remains extremely sensitive and highly reactive to Brexit headlines.” At 7pm GMT, the pound to euro rate was 1.1202 EUR, according to Bloomberg. The euro EURUSD slipped on Friday to $1.1469, compared with $1.1500 late Thursday in New York. 

Minh Trang, senior FX trader at Silicon Valley Bank, said: “The euro certainly feels like it found a floor.”

Speaking before noon on Friday, CNBC’s Julianna Tatelbaum reported the UK was the “only major region in the green”.

She said: “European stocks this morning are struggling for direction.

“The Stoxx 600 is currently just about flat on the day. Yesterday we saw some modest gains for the main European equity index, we also of course saw a positive close for Wall Street.

“But today I’m going to take you through the different regions, we did see green across the board early today, all four main regions were trading higher.

“But sentiment has turned a little bit more negative now and the only major region in the green at the moment is the FTSE 100 here in the UK.

“Now investors are dealing with a raft of new information over the last week, they’re digesting yesterday’s fresh comments from Jerome Powell.

“A series of negative headlines in the auto-space over the last 48 hours, so mixed trading results from European retailers.”

The comments follow sterling rising as much as 0.6 percent to $1.2851 on Friday, before settling around $1.28.

The British currency is headed for its best week since early November.

Against the euro the pound gained 0.7 percent to 89.615 pence.

At approximately 7pm on Friday however, the FTSE 100 index showed markets down by 0.36 percent.

A denial by Prime Minister Theresa May’s spokeswoman of a newspaper report knocked sterling off highs however, but it remained up on the day, with analysts citing a growing sense among some investors that Britain will not be leaving the EU on March 29.

However, not all analysts agree that a delay to Britain’s Brexit date will benefit the UK.

Mike Bell, global market strategist at JP Morgan Asset Management, said: “Politicians love to kick the can down the road but there is a cost associated with that.

“Consumer confidence has weakened, business confidence has weakened so that time comes with a cost.”

Parliament is set to vote on Mrs May’s withdrawal deal, agreed with Brussels, on January 15.