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Pound Rebound

Sterling rebounded off a two-week low, after a Bloomberg report that the United Kingdom and Germany were prepared to drop a key sticking point on Brexit negotiations fuelled hopes of a breakthrough in talks.

Sterling had a jump on stories suggesting there is a shift in the German government on Brexit demands, making it more likely that there could be an agreement.

Bloomberg quoted people familiar with the matter as saying that Germany would be ready to accept a less detailed agreement on the U.K.’s future economic and trade ties with the EU in a bid to get a Brexit deal done.

Hopefully the latest media reports will reduce market concerns of a hard Brexit for now and encourage hopes of a transition period which should be positive for Sterling in the near term.

A recent poll shows analysts expectations are that a No Deal Brexit would drop the value of the pound by another 8%, however if we leave with a deal in place it could rise as much as 6%.

The next few months of negotiations will be key and give us a good idea which way the markets will go.

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