This is an older news update for the British pound. Click here to view the latest daily update.

British pound soars following indications for a Brexit transition deal

British pound daily update

BY DEB SHAW | 

British pound daily update

Pound sterling is higher against all major currencies today. The pound is the strongest against the Australian dollar, the Japanese yen and the US dollar. The currency soared yesterday after the UK and the European Union agreed to a 21-month Brexit transition period and agreed to avoid a "hard border" with Ireland. Looking at GBP/USD, the pair broke through the critical 1.40 barrier and is currently trading above 1.4050. The pound has also done very well against the euro in recent days, and has strengthened against the common currency for the last 10 trading sessions in a row. 

For now, the Irish border issue remains unresolved, however the UK has committed to maintaining an open border with Ireland in exchange for a Brexit transition deal. Looking at the deal in more detail, it includes a legal text detailing a "backstop" for the Irish border. According to Davis, "it remains our intention to achieve a partnership that is so close as to not require specific measures in relation to Northern Ireland.” Following recent strength in the pound, we will upgrade our short-term outlook to bullish later today. Our medium-term outlook remains bullish. 

GBP/USD is currently above 1.4050. EUR/GBP is down, with the exchange rate above 0.8770. The pound is up against the Australian dollar and up against the Canadian dollar. GBP/AUD is currently above 1.8250, while GBP/CAD is above 1.8360.

This is a fairly heavy week for economic data and events from the United Kingdom. Thursday is the big day, given that a Bank of England meeting is scheduled. The Rightmove house price index accelerated from previous figures (2.1% vs. 1.5% prior). Later today, we’ll see the consumer price index, core consumer prices, the producer price index, and the retail price index. Consensus estimates are calling for inflation to decelerate in February. On Wednesday, we’ll see average earnings, jobless claims and public sector borrowing for February. On Thursday, we’ll see retail sales and potentially see the announcement of a Brexit transition deal during the European Council Meeting in Brussels. The Bank of England meeting is also scheduled for that day and includes an interest rate decision, a monetary policy report and the BoE’s meeting minutes. The Bank is expected to maintain the status quo on Thursday. Last week, Chancellor Philip Hammond upgraded the UK growth forecast in his Spring Statement

Updated 
Outlook
Bearish

Subscribe to the MarketsNow British pound daily update