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Pound rallies amid Brexit optimism

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The pound has jumped on the news that progress was being made in Brexit talks.

European Commission president Ursula von der Leyen said this morning that there is a “path to an agreement now”, causing the pound to gain half a cent against the US dollar to over $1.35.

“As things stand, I cannot tell you whether there will be a deal or not. But I can tell you that there is a path to an agreement now. The path may be very narrow but it is there,” she said.

“We have found a way forward on most issues but two issues still remain outstanding: the level playing field and fisheries. I am glad to report that issues linked to governance now have largely been resolved. The next days are going to be decisive.”

Today’s rally is seeing the pound jump to an almost 30-month high.

The Brexit optimism has also pushed markets higher, with the FTSE 250 up by 1.4%. The FTSE 100 index also jumped this morning by 72 points or 1.1% to 6586 points.

Biggest risers were house builders Barratt Development (+3.6%) and Persimmon (+3.2%).

Brussels bureau chief Daniel Boffey commented on the Brexit trade deal: “A clash over EU access to British fishing waters could still sink hopes of a post-Brexit trade deal, Ursula von der Leyen has said, with agreement said to be “so close but yet … so far away”.

“In an address to the European parliament, the European commission president said the issue of domestic subsidies, so long a thorn in the side of the negotiators, had been resolved. She reported that legal assurances that environmental, social and labour standards would not be undercut had also been secured, with fruitful continuing discussions on “future-proofing” against unfair competition offering a clear path to an agreement.”

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