Pound to euro price: Sterling rockets as Boris Johnson set to secure major new Brexit deal

The Sterling gained on Thursday, Christmas Eve, as Britain and the EU appeared on the brink of striking a post-Brexit trade deal. The news has raised hopes the UK will avoid a turbulent economic departure at the end of the year when the EU transition period ends on December 31.

The British pound extended gains and rose 0.4 percent against the euro in early London trade, to 0.9001 pence.

Sterling also strengthened against the dollar, and was up 0.6 percent to $1.3587.

The FTSE 100 rose by 20 points to 6,516, a rise of 0.3 percent, just after markets opened at 8am.

Lloyds Bank, which investors have come to see as a bellwether of sentiment towards a trade deal, rose 7 percent yesterday and another 6 percent this morning.

Boris Johnson is poised to hold a press conference later this morning to announce a deal has been reached.

The Prime Minister held a late-night conference call with his senior ministers yesterday as negotiators poured over the hundreds of pages of legal trade texts.

European Commission President Ursula von der Leyen is also expected to hold a news conference in Brussels at the same time.

Westpac macro strategist Tim Riddell told clients: "This time it really does appear that a deal will be struck just in time for Christmas.”

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He was optimistic that a deal could push the pound up to $1.40 - a level not reached since 2018.

But he added: "Potential for a more substantial move towards 1.4500 now seems unlikely given how positions exhaustion is so prevalent."

European stock futures also surged this morning as a trade deal edges closer.

Futures tracking an index of Europe's top 50 stocks was up 1.2 percent, while London's blue-chip index futures rose half a percent, held back by a strong pound.

More to follow...

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