- The pound is soaring after Boris Johnson secured a Brexit deal with the EU.
- The agreement now can be taken to the UK Parliament this coming Saturday where British lawmakers will vote on the deal Johnson and the EU have made.
- The new deal sees Northern Ireland remain in the customs union with the EU, while the rest of the UK would leave.
- The pound shot up 1.3% against the dollar in London morning trading.
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The pound is soaring after Boris Johnson, the UK prime minister, secured a deal with the European Union that would allow the UK to leave the trade bloc.
On Thursday morning trading the pound shot up as much as 1.3% against the dollar and 0.6% against the euro, while Germany’s DAX jumped 1% on the news and the FTSE 100 0.6%.
Boris Johnson’s team had been working with the EU in Brussels overnight on Wednesday to finalize an agreement that would suit both sides.
In this agreement, Northern Ireland will remain part of the customs union with the EU, means that it can trade freely with the Republic of Ireland. The rest of the UK will not be part of that customs union.
Johnson now has to go to UK lawmakers on Saturday to put the deal to vote in parliament, to see whether or not it will be accepted.
The pound earlier this morning had sunk 0.5% against the dollar, as the hopes of a deal had diminished, so the news of a deal being agreed has sent the pound at one point to a seven-month high against the dollar.
“It’s going to be a wild weekend, which will make the market open next week all the more unpredictable,” said Craig Erlam, senior market analyst at Oanda. “If the deal gets through Parliament, the pound could perform extremely well at the start of next week, despite having already rebounded more than 8% from the lows a month ago.”
However, Erlam warns that the next stage could throw a spanner in the works. “Anyone hoping that the process will be straightforward now is kidding themselves. With Labour whipping for a second referendum on the deal and the Lib Dems unlikely to support anything, there is still a good chance we’re heading for an extension and election, in order to get this over the line.
“Nothing in Brexit is ever simple.”