The latest news to cross the wires on the Brexit front are that the Democratic Unionist Party are now prepared to support May’s deal on the condition that the backstop has a time limit attached to it. This development has helped the pound add to its already handsome weekly gains. The $1.31 level has been breached against the greenback while €1.15 proved easy to conquer against the shared currency. This news is seen as a big win for May and potentially indicates she may be gaining some more support within the Conservative Brexiteer camp. The development comes at the end of what’s been an incredibly encouraging week for the pound which has seen the best part of 2% added to its value against the buck and euro.
Mario Draghi’s performance yesterday proved to be dovish as many had expected. The central banker chose to focus much more attention to the downside risks which face the eurozone. As a result he helped push the euro’s value lower against its peers. Even though the central bank have taken their foot off the gas when it comes to stimulus, it’s quite clear they’re still not ready to increase interest rates. This has allowed the pound to creep up toward the €1.16 level, a price not seen for a significant amount of time.
Have a good weekend.
Written by Viv Savani. 10:40am, January 25th 2019
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