Pound Rallies to Two-Week High on Optimism Over Brexit Meeting

(Bloomberg) -- The pound rallied to a two-week high amid optimism that the Brexit stalemate could be ended before Parliament wrests control of the process next week.

The currency extended earlier gains amid broad dollar weakness and after Theresa May’s spokesman said that a meeting Wednesday between the U.K. premier and European Commission President Jean-Claude Juncker would be a “significant” part of her plan to break the Irish border deadlock. Leveraged investors bought the currency on positive Brexit sentiment, according to two traders in London. May will meet Tory members of parliament to discuss Brexit later, according to her spokesman.

Pound Rallies to Two-Week High on Optimism Over Brexit Meeting

“It’s tempting to conclude that markets are anticipating a breakthrough in the Brexit negotiations ahead of the May-Juncker meeting tomorrow,” said Valentin Marinov, head of Group-of-10 currency strategy at Credit Agricole SA. This is helping both sterling and the euro versus the dollar “and boosting the pound versus the euro,” he said.

Sterling gained 0.9 percent to $1.3034, after earlier touching $1.3050. It also rallied versus the euro, up 0.7 percent at 87.94 pence per euro. The yield on U.K. 10-year government bonds was little changed at 1.17 percent.

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