Sterling keeps pushing higher - deal hopes stay elevated
Despite the mix of headlines from pundits and the individuals in and near the negotiations, Sterling continues to stay bid as the hopes of a deal being reached by the end of the month are well and truly raised. More recently, a tweet suggesting that a deal is likely to be agreed by the DUP has been dismissed by the DUP themselves, as the media seems to be in a frenzy of what may or may not happen and what people (close to the matter) may or may not be thinking.
Even so, the Pound is finding dips, with the latest setback finding buyers again to lift Cable back above 1.2800 again to potentially signal a move up into a higher range. For some time now, 1.2750-1.2800 has been a firm cap on the pair, but if a deal can be reached, then we can assume that a challenge on 1.3000 is likely at the very least, if not higher. That said, there is still some way to go, and as EC head Tusk has recently said, participants will know in 7-8 hours when Brexit will happen.
In the meantime, GBP traders are glued to their screens to keep an ear out for the latest developments, and it is fair to say that despite the gains seen across the board, it has been a messy day for headlines, with many conflicting reports hitting the wires today.
Once again though, EUR/GBP is testing lower levels again, and if we do move under 0.8600, then a 0.8500 test is the next challenge. This will depend on where we go from here, but the next 24-48 hours will be volatile, to say the least, with any deal then set to move onto the House of Commons for approval - if we even get this far.