Pound rebounds on Brexit trade deal hopes after hammering


The pound has made strong gains against the dollar over hopes of a breakthrough in Brexit talks.

Sterling has been further buoyed by France lifting a border blockade aimed at stopping the spread of a fast-spreading new COVID-19 strain.

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The pound was up by nearly two cents versus the US dollar at just over $1.35.

It has also climbed a cent versus the euro to just below €1.11.

The pound had been pummelled this week as countries around the world imposed travel bans against the UK to combat the new coronavirus variant, along with the imposition of tougher domestic coronavirus restrictions.

“The UK-French supply chain restrictions look to soon be back in play whilst the market remains increasingly convinced of a deal with just the fisheries hurdle, all of which is pushing sterling higher across the board,” said Neil Jones, head of FX sales at Mizuho.

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Meanwhile, the Confederation of British Industry has called for more government support for businesses, noting the deepening fall in business activity after coronavirus curbs were tightened last month.

A motor industry body also said UK car production slipped further last month, meaning output is down by almost a third so far.

In the 11 months to November, total UK car production was down by 31% compared with the same period in 2019, representing a loss of 380,809 models at a cost of around £10.5bn to the sector, according to the Society of Motor Manufacturers and Traders (SMMT).

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