By Barbara Kollmeyer, MarketWatch

FTSE 100 weighed in part by sterling strength

The British pound jumped Tuesday, shaking off losses seen at the start of the week, on a report of a possible draft Brexit agreement.

A report from Bloomberg suggested the two sides were closing in on a preliminary deal. That report extended gains after relatively optimistic comments made by Michel Barnier, the top EU negotiator.

The pound shot up to as high as $1.2796, after a level of $1.2606 seen late in New York on Monday. The currency lost ground Monday on fresh concerns the U.K. and EU won't reach a deal by the Oct. 31 deadline after a weekend of talks didn't yield a breakthrough.

Sterling saw its best two-day run in over a decade late last week. On Friday, it reached as high as $1.2706, its strongest since Theresa May was prime minister before Boris Johnson took over in July. Last Thursday, the pound saw its best single-day percentage gain since March.

A strong pound weighed on the FTSE 100 , which was trading almost flat despite gains for indexes across the U.S. and Europe. Given a chunk of U.K. companies derive revenue from outside the country, a stronger pound can hurt their bottom line.

Lloyds Banking Group (LLOY.LN) and the Royal Bank of Scotland (RBS.LN) each rallied over 5%, while multinationals including GlaxoSmithKline (GSK.LN) and Unilever (ULVR.LN) lost ground.

 

(END) Dow Jones Newswires

October 15, 2019 11:43 ET (15:43 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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