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Pound up as UK officials hint at rewrite of lawbreaking Brexit bill

Lucy Harley-McKeown
·2-min read
Britain's prime minister Boris Johnson. Photo: Toby Melville/Reuters/TPX images of the day
Britain's prime minister Boris Johnson. Photo: Toby Melville/Reuters/TPX images of the day

The pound rose against the euro (GBPEUR=X) and dollar (GBPUSD=X) on Monday morning as traders digested media reports that UK officials would consider amending Boris Johnson’s controversial lawbreaking Brexit bill.

Both the UK and European Union are attempting to revive Brexit trade deal talks as recent rounds of negotiations have met an impasse, with Johnson announcing on Friday that he would prepare for a no-deal unless the EU changes its stance on certain sticking points.

Points of contention still lie around fair competition rules, dispute resolution and fisheries, with reports from Bloomberg that MPs have hinted they are willing to water down Johnson’s controversial Internal Markets bill. The bill is due to pass through the House of Lords this week.

On Friday, the prime minister said he “had to make a judgement” about the likely outcome of negotiations, with just 10 weeks to go until the end of the transition period.

Watch: Pound rises against both dollar and euro

READ MORE: Bank of England's Bailey: Negative rates best in 'economic upturn'

On Sunday, cabinet minister Michael Gove said that a post-Brexit trade deal is still possible and the door is “still ajar.”

The bloc had not been willing to produce key detailed legal texts or been willing to intensify talks, meaning some of the progress had been squandered, Gove told the BBC’s Andrew Marr on Sunday.

Gove said: “We hope the EU will change their position and we are certainly not saying if they do change their position we can't talk to them."

By mid-morning in London the pound was up 0.4% against the euro, and 0.7% against the dollar.

How the pound is faring against the euro. Chart: Yahoo Finance
How the pound is faring against the euro. Chart: Yahoo Finance

"The market is split almost 50/50 on whether there's going to be a deal or not, and because it's a Monday, we have hope that the Internal Market Bill will be watered down," said Kit Juckes, a macro-strategist at Societe Generale.

"If we don't get a deal EUR/GBP heads off somewhere between 0.95 and perhaps briefly the wrong side of parity as rates go sub-zero, But for now, the soap opera continues."

Watch: Door remains ‘ajar’ to conclude a Brexit deal, says Robert Jenrick