In context of an affirmative post-Brexit settlement surroundings sketched out by the European Union earlier on Wednesday, the British currency had hopped to a nearly two and a half years peak against a sharply moderating American currency, while the US Dollar Index (DXY) measured against a basket of six major currencies on an average extended its losing run, dropping another 0.24 per cent to wind down the day’s FX market at 90.24.
On top of that, following upbeat remarks from EU Chief Executive who was quoted saying earlier in the day that there had been progresses over a trade deal with Britain, the British Pound stormed past a psychologically critical $1.35-level against the greenback for the first time since the May of 2018.
Nonetheless, EU Chief had also added that the next few days would likely to be critical, suggesting an upscaled volatility in the FX market.
Positive Brexit headlines help Pound strengthen over 2% this week
If truth is to be told, much of the Wednesday’s gains in British currency against its American counterpart had been almost entirely galvanized by a positive market sentiment created by a cascade of riant media headlines, while on Yesterday, a BBC political reporter had tweeted that there had been fresh signs of a post-Brexit settlement deal.
Nonetheless, playing down the media excitements whirling over the FX market this week, EU Chief Ursula von der Leyen had also cautioned earlier in the day that the UK negotiators had still been playing hardball over access of British fishing water for EU vessels, nonetheless, talks had progressed by a substantial margin over other contentious elements such as ensuring a guarantee of fair competition for the EU companies.
Citing statistics, in the day’s FX market round off, the British pound gained 0.35 per cent against the greenback to $1.3507 after hitting an intra-session high of $1.3555, its highest level since the May of 2018, while against the bloc’s common currency Euro, the British currency advanced 0.1 per cent to 90.15 pence per euro.
Meanwhile, adding that the FX markets had been bracing for a rollercoaster ride over the next few days which would likely to be dictated by the comments from Brexit negotiators, an analyst at Barclays said late in the day, “Sterling traded Wednesday with a more positive sentiment, as the market began to price in a stronger chance of a Brexit deal now compared to late last week. From our view, the market is pricing 75% odds of the EU and UK coming to agreement. ”