LONDON MARKETS: Pound Surges On Report Of Possible Draft Brexit Deal
October 15 2019 - 11:58AM
Dow Jones News
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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