Sterling rebounds strongly on an RTE news report that EU is going to offer the a UK-wide customs union as a way to work around the Irish backstop deadlock. And, the way to handle it is that in the Brexit Withdrawal Agreement, there will be a specific commitment to a UK wide customs arrangement. However, a formal EU-UK customs union will require a separate agreement. By offering that, EU will still insist on a backstop to be in place.
The details of the idea are remain to be seen. And it’s uncertain whether UK Prime Minister Theresa May will accept it. Nor is it clear whether there is any technical issues overlooked. But for now Sterling is enjoying a notable rebound as seen in GBP/USD.
