The British pound surged against both the dollar and the euro in response to the news that the British government is willing to pay for market access to the EU after the country leaves the EU. With this trend the markets are betting on a ‘soft Brexit’.
The pound rose 1.5 percent on Thursday against the greenback and ended at 1.2691. That’s the strongest position of the pound since the flash crash in early October. Then the currency lost 6 percent of is value in a matter of minutes.
The pound rallied against the euro as well. The exchange rate EUR/GDP stood today at 0.8445, up from a week’s low at 0.8368. GBP/EUR hovered around 1.1842, down from the week’s best rate at 1.1949.
The shifts in these rates occurred after UK’s Brexit minister, David Davis, said in parliament that the government is willing to pay the EU for market access. The Brits want a good deal that ensures the possibility to export freely to Europe. Jeroen Dijsselbloem, chairman of the Euro group, said the EU is willing to give the UK a secure access to the common market, but this comes at a price.
