Investing.com – The pound soared on Monday following news that ‘decisive steps’ had been made between the United Kingdom and the European Union on the Brexit transition deal.
At 12:48 GMT, was 1.4068, an increase of 0.90% on the previous session close.
Sterling reached 4-week highs on Monday afternoon as the two sides delivered a press conference announcing the ‘significant’ progress.
A new version of the draft withdrawal bill for Brexit was jointly published by the UK and EU and unveiled at a joint press conference led by EU’s chief Brexit negotiator Michel Barnier and the UK’s Brexit secretary David Davis.
According to the pair, complete agreement had been reached on Phase 1 points negotiated in December on the financial settlement and citizens’ rights, however issues still exist surrounding the Irish border.
EU citizens arriving in the UK during the transition period will receive the same rights as those who arrive before the March 30 2019.
Intense talks on the Irish border will take place in the coming weeks.
Monday’s announcement sought to give reassurance to the private sector, which has been increasingly calling for clarification on Brexit negotiations.
Barnier said that during the fixed term transition period the UK will preserve ‘all the benefits and advantages of single market and customs union’ and therefore during this time the UK will abide by EU laws. Barnier also stressed that during this time the UK will not be involved in EU decision making processes.
David Davis said that the transition agreement will give certainty to businesses operating in the UK and EU as it will allow them to make investment decisions without fear of disruption.
Michel Barnier did reiterate at the end of the press conference that ‘nothing is agreed until everything is agreed.’
The upcoming EU Summit will take place on Thursday and Friday. where the heads of the 28 EU countries including UK prime minister Theresa May, will meet to discuss the Brexit transition.
Michel Barnier will present the draft agreement to the European Council on Friday for approval.
Following the news, was down 0.82% to 0.8747.
The pound made significant gains against safe haven currencies, with up 1.12% to 149.46 and jumping 0.93% to 1.3399.
Investors will be watching UK data this week with numbers on Tuesday and data on Wednesday.
While the meet to set interest rates on Thursday.
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