The Pound hit its highest level against the Dollar in seven weeks amid hopes that a no-deal can be avoided, after reports said the DUP, Northern Ireland’s largest political party, was prepared to abide by some European rules after Brexit.
The report was swiftly denied by the party, but still supported the view that Britain and the EU can agree a deal to replace the Irish backstop, the main sticking point in negotiations between London and Brussels. Talk of an alternative to the Irish backstop, which Boris Johnson wants scrapped, comes as investors slash their short positions on the Pound because of the receding risks of a no-deal Brexit.
The Pound has now risen more than 4% over the past eight days, moving higher after Parliament passed legislation that would force the government to seek an Article 50 extension and avoid a no-deal Brexit at the end of October. There are a significant reversal of fortunes from earlier this month when the talk of a no-deal Brexit intensified.
09:30 – GBP: Gross Domestic Product expected to increase to 0.3%.
09:30 – GBP: Manufacturing production forecast at 0.3%.