The pound has soared after a Brexit deal was agreed between UK and EU negotiating teams.
Sterling surged more than 1% against the dollar, climbing above $1.29, after Prime Minister Boris Johnson said the UK and EU had agreed a “great new deal”.
The pound also jumped against the euro, and was trading above €1.16.
European Commission President Jean-Claude Juncker said: “Where there is a will, there is a deal – we have one!”
He added: “It’s a fair and balanced agreement for the EU and the UK and it is testament to our commitment to find solutions. I recommend that [EU summit] endorses this deal.”
Pound v Dollar
The agreed deal will still need the approval of both the UK and European parliaments, while Northern Irish party the DUP has cast doubt on its sign-off, saying it still cannot support it.
Earlier, the DUP released a statement saying it could not back proposals “as things stand”, and – after the PM’s announcement – said its statement “still stands”.
Analysts warned that this opposition from the DUP could still scupper the deal.
Michael Brown, senior analyst at Caxton, noted that “some of the wind has been taken out of the pound’s sails after reports that the DUP are not yet on board to back a deal”.
“The Parliamentary arithmetic for passing a deal looks challenging,” he said. “Attention will continue to focus on whether the new agreement will pass in the Commons on Saturday, while sterling traders will continue to pay close attention to developing headlines from this afternoon’s EU summit.”
Pound v Euro
News of the deal also lifted the stock market, with the FTSE 100 index up 0.5% at 7,203.41.
Shares in companies with heavy exposure to the UK economy – such as housebuilders and banks – saw some of the biggest increases.
Adam Marshall of the British Chambers of Commerce said many businesses would “reserve judgment until they see the detail”, adding that firms “need a chance to analyse precisely what the terms of this agreement would mean for all aspects of their operations”.
“Let’s not forget, we’ve been here before,” he added. “There is still a long way to go before businesses can confidently plan for the future.
“For business, this deal may be the end of the beginning – but it is far from the beginning of the end of the Brexit process.”