In typical eleventh hour fashion, the UK and EU have agreed a new Brexit deal, sending the pound soaring to seven month highs against the dollar.
The pound peaked around 1.30 in a knee jerk rally, following confirmation of the agreement before some profit taking kicked in. That coincided with confirmation from the DUP that their position hasn’t changed, which suggests they won’t support the deal on Saturday, making the parliamentary arithmetic on Saturday even tighter.
Anyone hoping that the process will be straightforward now is kidding themselves. With Labour whipping for a second referendum on the deal and the Lib Dems unlikely to support anything, there is still a good chance we’re heading for an extension and election, in order to get this over the line. Nothing in Brexit is ever simple.
It’s going to be a wild weekend which will make the market open next week all the more unpredictable. If the deal gets through Parliament, the pound could perform extremely well at the start of next week, despite having already rebounded more than 8% from the lows a month ago.
