Sterling climbed to its highest level since July versus the dollar on Friday, as optimism for a Brexit deal took hold. Firstly, there were reports that the DUP was prepared to allow Northern Ireland to retain certain EU laws after Brexit, possibly acting as a replacement to the controversial backstop. However, this was dismissed by the DUP shortly after.
The pound managed to hold onto its gains, possibly due to reports that the Prime Minister will meet European Commission President, Jean-Claude Juncker, later today. This will be the first time that the pair have met since Johnson took office in July. Johnson said he is “cautiously optimistic” about getting a deal, but also added that the UK will leave on the 31st of October “whatever happens” and will reject any offer of a delay to the deadline. He is also due to meet with the EU’s Chief Brexit negotiator, Michel Barnier, who recently said that there is “no reason to be optimistic” about getting a deal.
The Bank of England’s interest rate decision is due to take place on Thursday this week, with no expectation for any movement on interest rates. From Tuesday onwards, the Supreme Court will decide whether the the government’s prorogation of Parliament was lawful.
