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Sterling hits one-month high vs euro on comments from European Parliament's Brok
December 4, 2017 / 11:49 AM / 9 days ago

Sterling hits one-month high vs euro on comments from European Parliament's Brok

LONDON (Reuters) - Sterling jumped and UK government bond futures fell on Monday after a member of the European Parliament’s Brexit group said there was a “very good chance” of a deal on an initial divorce package between Britain and the European Union.

Elmar Brok said he was “astonished” at how far the negotiations had come and that differences remained over “just a few words”.

The pound climbed 0.8 percent on the day to a one-month high of 87.686 pence per euro, up from 88.17 pence before the comments.

Against the dollar, sterling climbed around three-quarters of a cent on the comments to the day’s highs of $1.3518.

“To me, this is a Brexit breakthrough and it should be solid for the pound,” said Neil Jones, Mizuho’s head of hedge fund currency sales in London.

“I sense that we’re moving towards a sign-off that will enable the UK to move into trade talks and that’s only going to be a good thing for the pound.”

British government bond futures extended losses by around 10 ticks after Brok’s remarks, trading 47 ticks down on the day at 124.16 at 1128 GMT.

Britain’s FTSE 100, whose strong foreign currency exposure makes it fall when sterling strengthens, pared earlier gains and was last up 0.4 percent.

Reporting by Jemima Kelly, David Milliken and Helen Reid; Editing by Saikat Chatterjee

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