UK

Pound To Euro Exchange Rate Falls And Then Recovers After Brexit Divorce Deal Announcement

Market reacts to Brussels news.

08/12/2017 08:12 GMT | Updated 08/12/2017 12:03 GMT
Paul Hackett / Reuters
Currency traders will be observing political developments on Friday

The pound initially declined against the euro and US dollar on Friday morning as news of the Brexit divorce deal was announced, but quickly recovered.

Sterling declined by just 0.004 against the Euro and by 0.0057 against the dollar in the minutes after the deal was struck.

The currency was trading at €1.1466 and $1.3460 as of 12.00pm GMT.

Earlier, the pound managed to hit a six-month high of €1.151 against the Euro before falling back slightly.

It came as confirmation of a deal between Britain and the European Union was finally announced.

After a pre-dawn meeting in Brussels, the Prime Minister joined European Commission President Jean-Claude Juncker in announcing the breakthrough.

Juncker announced that “sufficient progress” had been made in the talks to allow both sides to move onto discussions of a future trade deal between the UK and EU after 2019.

May said the deal “had required give and take on both sides” and after “some tough negotiations” she had agreed the ‘divorce bill’, which is expected to total up to £50bn.

She also guaranteed rights for EU and UK citizens, including a continuing, time-limited role for the European Court of Justice, and new words on the crucial issue of Northern Ireland.

“I’m confident that we can ensure we both won’t have a hard border in Northern Ireland but will retain the economic integrity of the United Kingdom,” May said.

“In Northern Ireland we will guarantee there will be no hard border.  We agreed…there should be no barriers north-south or east-west.”

With reporting from Paul Waugh.

Follow our live blog for the latest updates as the Brexit divorce deal is agreed.