October 1, 2018 / 1:19 PM / 2 months ago

Sterling rallies on report UK to propose Irish border issue compromise

FILE PHOTO: British Pound Sterling banknotes are seen at the Money Service Austria company's headquarters in Vienna, Austria, November 16, 2017. REUTERS/Leonhard Foeger/File Photo

LONDON (Reuters) - The British pound jumped more than half a percent against the dollar and gained against the euro after a Bloomberg report that the UK government was proposing a compromise on the Irish border issue.

“It creates some optimism that a (Brexit) deal could be reached,” Lee Hardman, a currency strategist at MUFG, said, while adding the optimism was “speculative” at the moment given that the Irish border remains one of the trickiest hurdles to resolve before agreeing a Brexit deal.

The pound briefly rallied to the day’s high of $1.3118 against the dollar after the Bloomberg report, and climbed to 88.58 pence versus the euro.

Brussels and London have made positive noises in recent days on major obstacles, including how to keep an open border between the British province of Northern Ireland and European Union -member Ireland.

Reporting by Saikat Chatterjee; Editing by Tommy Wilkes

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