FTSE and pound soar in expectation of a last-minute Brexit deal

standard– Hopes for a last-minute UK-EU trade deal were set to send some much-needed festive fizz through the markets today setting the pound up to reach a two-year high against the dollar.


Boris Johson is expected to address the nation from Downing Street at 11am, where he is spending Christmas in Tier 4 lockdown, like almost half of his Covid-battered country.

Final details over fishing rights and the level playing-field over regulation and competition rules were thrashed out by diplomats from both sides in a pizza-fuelled late-night cramming session in Brussels.

It set the scene for an upbeat half-day close to the year for the last remaining traders to leave their desks before the City shuts down for Christmas, against a backdrop of mounting virus deaths, tightening Tier 4 lockdown restrictions and chaotic scenes in Dover.

Sterling – which has been seen as the closest tracker of Brexit sentiment – jumped against the dollar and the euro, advancing 1.2 per cent to $1.36 and 0.4% to 1.22 euros. The FTSE 100 was being called up 41 points at 6534.1 on the IG Index platform before trading resumed this morning.

The upbeat mood was reflected across global markets with shares rising across Asia, led by 1.% gains on South Korea’s Kospi, with US equity futures edging up after the S&P 500 closed  0.1% higher.

Fiona Cincotta, from City Index UK, said: “Those stocks that are closely tied to the health of the UK economy are the ones where we expect to see a reflection of this optimism. We saw it yesterday as the rumours were coming through with strong performance in domestic banks, housebuilders and retailers with the idea of an easier supply chain. These are the sectors which could do well today.”

She described the sentiment sweeping the City as: “Reilef that we got there. Sheer relief that we’ve hopefully got something agreed after a long four-and-a-half years.”

David Madden, market analyst at CMC Markets UK, said: “Increased chatter than the UK and the EU will reach a trade deal has boosted sentiment.

“The Covid-19 crisis is still very much in the news but for now traders are fixated on the UK-EU situation.”

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