Pound sterling ached a two-month high of $1.2574 against the dollar after European Commission President Jean-Claude Juncker said “we can have a deal” and “Brexit will happen” following “positive” talks with Prime Minister Boris Johnson. Against the euro, the pound hit 1.1360 – a raise of more than 5 percent since sub -$1,20 lows earlier this month.
Thu Lan Nguyen, FX & EM analyst from Commerzbank in Frankfurt, told Pound Sterling Live: “GBP traders will turn their attention back on the news flow from Brussels and London.
“Comments by the President of the EU Commission Jean-Claude Juncker last evening gave rise to the hope that there is still a chance of reaching an agreement until the end of October which provided some support for Sterling.”
Adam Cole, foreign exchange strategist with RBC Capital Markets, added: “GBP is this morning retesting highs made late in the North American session on the back of EU Commission President Junker’s comment that ‘I think we can have a deal’ and that he was ready to remove the current Irish backstop if the UK came up with an alternative way of guaranteeing no hard border that is just as robust.”
Brexit Secretary Stephen Barclay has travelled to Brussels the day after Me Juncker insisted “we can have a deal” before the Halloween deadline.
Mr Juncker said his meeting with Mr Johnson in Luxembourg on Monday was “rather positive” as he assured he was “doing everything to have a deal” to prevent a “catastrophic” no-deal Brexit.
Speaking to Sky News, Mr Juncker said “we can have a deal” but was unable to put the chances at more than 50/50 when pressed.
He said: “I’m doing everything to have a deal because I don’t like the idea of no deal because this would have catastrophic consequences.
“It’s better for Britain and for the European Union to have an organised deal.”
Mr Juncker said that he has no “emotional relationship” with the Irish backstop, which aims to prevent a hard border returning to the island of Ireland but has been a major sticking point to getting a deal through Parliament.
He added: “If the objectives are met – all of them – then we don’t need the backstop.”
Speaking following his meeting with Mr Juncker, Mr Johnson said “I think we are making some progress,” saying that Mr Juncker’s remarks he was not “emotionally attached” to the Irish backstop was encouraging.
Mr Johnson wants the backstop – designed to protect the open border between Northern Ireland and Ireland after Brexit – removed from the withdrawal agreement with the EU.
The Tory leader added: “That is progress, because they weren’t saying that a month ago.
“But let’s see where we get. It’s vital, whatever happens, that we prepare for no-deal.”
Meanwhile, Mr Barclay’s department said he will meet Michel Barnier to “take stock” following discussions between the Prime Minister’s Europe adviser David Frost and Taskforce 50 – the EU unit dealing with the UK’s departure.
Ahead of Friday’s meeting, Mr Barclay warned the EU against a “rigid” approach and suggested the final details of an alternative to the Irish backstop may not need to be resolved until the end of 2020.
Mr Barclay said the Tory leader had shown he was willing to be “creative and flexible” by considering an all-Ireland approach to plant and animal checks, and suggested that it was now for the European Commission to shift its stance.