Pound rallies on signs that a Brexit deal is finally here.
The pound rallied higher by around 1% on Wednesday on expectation that a deal on Brexit could finally be secured before Christmas. British government bonds also enjoyed their best performing day in a month on the news as a deal reduces the chances of the Bank of England having to take interest rates into negative territory.
Initial reports suggested that an agreement could be announced prior to Thursday however that did not materialise and this morning’s scheduled 8am announcement has also been pushed back slightly. Any deal will be put in place as of the 1st Jan despite not being officially ratified in order to avoid a temporary return to WTO trading terms.
Despite the news sterling remained fairly flat after the initial jump up, appearing to want to wait for official confirmation. Ireland’s foreign minister Simon Convey came out at 8am confirming his expectation for a deal on Thursday.
The latest coronavirus update yesterday saw Health Secretary Matt Hancock announce that a further six million people in the east and south east of England will enter tier 4 on Boxing Day. This comes as yet another strain of the virus with a high transmission rate was discovered coming to the UK shores from South Africa. As a result, the UK have now banned all travel to South Africa with immediate effect.
Over in the states President Donald Trump yesterday vetoed the sweeping defence bill that authorises a top line of $740 billion in spending and outlines Pentagon policy. Congress must now vote again to override Trump.