October 11, 2019 / 7:57 AM / 10 days ago

Sterling rally takes a breather as EU Tusk says no guarantee on Brexit deal

British five pound banknotes are seen in this picture illustration taken November 14, 2017. REUTERS/Benoit Tessier/Illustration/Files

LONDON (Reuters) - A broadening rally in the British pound was cut short on Friday after European Council President Donald Tusk said Britain hasn’t come up with a “realistic and workable” solution to resolve the Brexit deadlock.

The pound surged above $1.25 in early London trading after Prime Minister Boris Johnson and his Irish counterpart unexpectedly said on Thursday they had found a pathway to a possible deal at last-ditch talks.

Against the dollar, the pound rallied as much as half a percent higher above $1.25, taking its gains to nearly 2.5% since late Thursday afternoon.

Versus the euro, the pound rose as high as 88.05 pence. But the currency halved its gains against the dollar and the euro after Tusk’s comments.

Reporting by Saikat Chatterjee and Sujata Rao

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