News that a Brexit deal has been agreed sent the pound surging. The pound looks to target $1.30 , although there could well be more wind in the sails with a move towards $1.34 not inconceivable.
Interestingly, the FTSE which often trades inversely the pound, has also pushed higher on the news, underscoring the relief felt by traders that a no deal Brexit could well be avoided. Banks and house builders are dominating the upper reaches on the top 100 index. The FTSE 250, which is comprised of stocks more exposed to the domestic economy has rallied over 1%.
The volatility in the pound and the UK markets won’t stop here. This is just half the battle. Pound traders will now turn their attention to the chances of Boris Johnson’s Brexit deal making it through Parliament.
The DUP, whose vote is critical to Johnson to get the Brexit deal through the House of Commons has already clearly rejected the deal as stands. There is a chance that the deal could get through Parliament, but as we have seen several time before it is by no means a sealed deal yet.
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