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Pound jumps as Raab indicates Brexit deal will be done in three weeks

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Brexit secretary Dominic Raab arrives at Downing Street in London. Henry Nicholls/Reuters

The pound rallied against the dollar (GBP-USD) and euro (GBP-EUR) on Wednesday afternoon as UK’s Brexit secretary said a deal with the EU should be finalised within weeks.

Dominic Raab said in a letter to a House of Commons scrutiny committee that he would be happy to give evidence “when a deal is finalised, and currently expects 21 November to be suitable.” The phrasing implies that Raab, who is the secretary of state for exiting the EU, expects Britain to reach a deal with the EU on future trading relations post-Brexit within three weeks.

The pound rallied as much as 1% against the dollar when news of the letter broke, but quickly gave up some of those gains. It was half a percentage against the dollar and up just over 0.6% against the euro at 4.05pm.

Halloween rally: the pound is gaining on the dollar. Graph: Yahoo Finance UK

“We finally have a concrete date from Raab regarding a Brexit deal being finalised, and the pound has jumped in response. We will have to wait to see if this date can be stuck to, and if anything leading up to November 21st may cause more market jitters,” said Hamish Muress, a currency analyst at OFX.

“Either way, we have long maintained that the pound is a stickler for Brexit details, and in the last few weeks we’ve seen very few updates, particularly since the EU Summit.”

Britain is due to leave the European Union in March next year. Both sides have agreed to the exit terms, but differences remain on key points including the border between the Republic of Ireland, which will remain in the EU, and Northern Ireland, which will not.