Here's how the pound reacted to the breakthrough in Brexit talks

Courtney Goldsmith
Follow Courtney
Sterling Rates To Fluctuate During Brexit Negotiations
Brexit talks are moving on to phase two (Source: Getty)

The pound has lifted against the US dollar and the euro follow an early morning announcement that Brexit talks would move on to their second phase.

Following overnight gains that took the currency to as high as $1.35 against the dollar, sterling slipped immediately after the Brexit breakthrough. It has since risen back up to $1.3487.

Against the euro, the pound was up 0.32 per cent to €1.1482.

"After a week of Brexit blunders, news that the UK and EU have made ‘sufficient progress’ in their phase one negotiations – crucially including a DUP-pleasing deal to avoid a hard Irish border but with no ‘special status’ for Northern Ireland – sent sterling higher this Friday," said Connor Campbell, financial analyst at SpreadEx.

"Though inarguably pretty damn healthy, this early growth does suggest a level of reticence from investors, who appear to be taking on board Donald Tusk’s warning that the real hard part – i.e. the forging of a new relationship between the UK and EU – is still to come.

"Predictably the FTSE got little out of all this, with the UK index wilting in the face of the pound’s push. It is perhaps a sign of the swell of positivity, however, that the FTSE managed to avoid tipping into the red; instead the index opened effectively flat at 7320, at the lower end of its recent trading," Campbell said.

Ranko Berich, the head of market analysis at Monex Europe, said:

The Brussels fudge that May and Juncker have served up this morning has gone down a treat for sterling. The pound is trading up against almost all major partners, and has reached a six month high against the euro.

However, he added that the move looked like a "classic Eurozone can kicking exercise".

Jean-Claude Juncker confirmed this morning that Brexit talks can move onto the second phase of negotiations, meaning post-Brexit trade talks will finally be on the table.

Read more: Juncker confirms Brexit talks can progress to second phase

Related articles