- The pound soared after Boris Johnson secured a Brexit deal with the EU, but later pared its gains after an Irish political party withdrew its support for the deal.
- The agreement will be taken to the UK Parliament this coming Saturday where British lawmakers will vote on the deal.
- The new deal sees Northern Ireland remain in the customs union with the EU, while the rest of the UK would leave.
- The pound shot up 1.3% against the dollar in London morning trading, before falling to -0.3%.
- View Markets Insider’s homepage for more stories.
The pound is seesawing, after Irish leaders pulled support for Boris Johnson, the UK prime minister, who had earlier secured a deal with the European Union that would allow the UK to leave the trade bloc.
On Thursday morning trading the pound shot up as much as 1.3% against the dollar before falling to -0.3% after the Irish DUP, a political party in Northern Ireland pulled, its support for Johnson’s deal.
Johnson’s team had been working with the EU in Brussels overnight on Wednesday to finalize an agreement that would suit both sides.
In this agreement, Northern Ireland will remain part of the customs union with the EU, means that it can trade freely with the Republic of Ireland. The rest of the UK will not be part of that customs union.
Johnson now has to go to UK lawmakers on Saturday to put the deal to vote in parliament, to see whether or not it will be accepted.
However, the Northern Irish DUP might throw a wrench in those plans.
The pound earlier this morning had sunk 0.5% against the dollar, as the hopes of a deal had diminished, so the news of a deal being agreed has sent the pound at one point to a seven-month high against the dollar.
“It’s going to be a wild weekend, which will make the market open next week all the more unpredictable,” Craig Erlam, senior market analyst at Oanda said before the DUP announcement. “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.”
However, Erlam warns that the next stage could throw a spanner in the works. “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.
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