The pound rises after UK and EU agree draft declaration

Sterling made a slight gain against the dollar following leaked Brexit text that showed the UK and EU reaching an agreement on their future relationship.

EU Flag and UK Flag
Source: Bloomberg

The pound climbed 1% against the dollar to $1.29 after Britain and the EU agree to maintain an ‘ambitious, broad, deep and flexible partnership’ post-Brexit, according text from a draft declaration that was leaked on Thursday.

UK Prime Minister Theresa May and EU Commission President Jean-Claude Juncker have agreed on most of the major points outline in a Brexit draft agreement that outlines Britain’s future relationship with the EU.

UK-EU agree to ‘flexible’ future

The leaked draft will not offer May the ‘frictionless’ trade that she initially asked for with the EU post-Brexit, but the wording of the declaration remains very positive as the prime minister hopes to gain support for her deal from the 27 EU member states and MPs in the House of Commons later this month.

‘While it cannot amount to the rights or obligations of membership, the Parties are agreed that the future relationship should be approached with high ambition with regard to its scope and depth, and recognise that this might evolve over time,’ the draft document says.

‘Above all, it should be a relationship that will work in the interests of citizens of the Union and the United Kingdom, now and in the future.’

The document goes on to say how the EU and the UK ‘will convene a high level conference at least every six months from the date of the United Kingdom’s withdrawal from the Union to take stock of progress’, with the aim of strengthening their future relationship in the years after Brexit.

President of the EU Council Donald Tusk tweeted that the text ‘has been agreed at negotiators’ level and agreed in principle at political level, subject to the endorsement’ of EU leaders at Sunday’s summit.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IG Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by writer