On Monday afternoon the pound jumped higher after the Prime Minister secured a new post-Brexit deal for Northern Ireland.
The deal is significant as it will end long running tensions after the UK’s withdrawal from the EU, but unless the deal is cleared by the DUP and Tory Eurosceptics the pound could still see volatility, but none the less it will end a lengthy period of uncertainty.
Sterling rose 07% higher to $1.20 which was up 0.3% at €1.14 once the deal was signed between Rishi Sunak and European Commission President Ursula von der Leyen.
On Monday the FTSE 100 Index was trading at 0.6% higher at 7929.4.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said, “Dawn may be about to break on a new era of calmer relations between the UK and the European Union, but hopes still aren’t racing away that it will herald a significant post-Brexit boost for the economy.
“This new consensual approach should help for other thorny political problems such as migration, but in itself it’s unlikely to move the dial much for a big uplift to UK trade immediately.
“There are some lingering concerns about opposition in Parliament, which would have to ratify the deal, but the power of the Conservative rebels has been weakened.”
Walid Koudmani, chief market analyst at XTB said, “Any further roadblocks in the process could prove to be quite counterproductive for the moods of investors and could lead to a pullback from current levels which have already acted as a resistance in the past.”