Amid the optimism about reaching a good Brexit deal, the pound rose against both the US dollar and the euro. The pound rose against the dollar by 1.4%, to trade at $1.6035 per pound on Tuesday, and it jumped against the euro to the highest level in 7 months, to reach €1.1543.
This rise in the price of the GBP comes after optimistic progress in discussions between officials in the United Kingdom and the European Union, where on the final draft there were made various agreements on Britain’s exit from the European Union. However, despite all these positive moves, analysts believe that the GBP may be rising only for a short time.
Market analysts believe that the failure of the British government and parliament to agree on European plans will not lead to a positive exit from the crisis. If the deal is not finalized by the beginning of next year, the pound is likely to fall drastically by the end of 2019.
British Prime Minister Teresa May has to convince members of the Northern Irish Democratic Unionist Party, where many see the problem regarding the Irish border issue pending, and question whether Teresa May will be able to finally get parliamentary approval.
It should be noted here that the pound has fluctuated since the results UK’s exit referendum in June 2016. Ever since, the GBP has been down about 10% against both the dollar and the euro.
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