LONDON (Reuters) – Sterling extended gains on Thursday and appeared to be ready for another higher push while traders awaited confirmation that Britain and the European Union had finally secured a deal to secure the trade relationship. to rule when the Brexit movement ends on 31 December.
The currency has strengthened 1.4% against the dollar since Reuters reported around 1330 GMT on Wednesday, citing sources, that the Brexit deal soon appeared.
It is now around $ 1.3580, up 0.6% on the day and heading towards the 2-1 / 2 high of $ 1.3625 last week.
Against the euro, it rose 0.3% by 0830 GMT at 89.9 pence.
There is no official confirmation of a deal yet but sources say a deal is close as British Prime Minister Boris Johnson held a late-night conference call with his prime ministers, with negotiators betraying re- writing of legal texts.
While pound and UK stocks have risen strongly in the last few weeks as last-minute contract speculation has grown, the consensus is that most -some UK assets remain below low value and will receive more when a contract is confirmed.
FTSE mid-cap stocks, which are more directly on the UK domestic economy, rose 0.7% to their highest level since February.
“We are fat UK households and a little sterling,” researchers at Candriam told reporters.
“UK equities are the biggest value to play. They should benefit fully from relief if we find Brexit agreement and from the recovery when we emerge from the health crisis. ”
The Brexit deal hopes to push UK 10-year borrowing costs more than 10 basis points higher on Wednesday. The market has since stalled as it awaits confirmation of a contract and also with the pressure on the UK economy from Brexit and coronavirus-related locks.
Reciting with Sujata Rao; Edited by Rachel Armstrong