The pound rallied to the highest since July after UK Prime Minister Boris Johnson emphasised he wanted to get a Brexit deal before next month’s deadline.
Sterling led gains in the G-10 after Johnson said at a press conference with his Irish counterpart Leo Varadkar that he would “overwhelmingly prefer” to get a deal by October. The currency had already been bolstered by better-than-expected data that eased concerns that the UK may be facing a pre-Brexit recession.
The pound has rallied this month to recoup most of its losses since Johnson came to power, as the UK Parliament has intervened to force him to seek another extension to the Brexit deadline. That has led traders to rush to cover short positions built up on fears he would drive through a no-deal Brexit on 31 October.
“A lot of negatives are in the price of the pound and the recent short-squeeze may continue for now,” said a currency strategist. “We expect the Brexit delay bill to get a royal approval and thus push the risk of a no-deal Brexit beyond the fourth quarter of 2019.” – Bloomberg News.
The pound climbed 0.51% to USD1.2346 on Monday (9 September).
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