Thursday 19 July 2018

Sterling dips after deal on Border stalls

European Commission President Jean-Claude Juncker, right, walks behind British Prime Minister Theresa May prior to addressing a media conference at EU headquarters in Brussels. Photo: AP
European Commission President Jean-Claude Juncker, right, walks behind British Prime Minister Theresa May prior to addressing a media conference at EU headquarters in Brussels. Photo: AP

Jemima Kelly and Gavin McLoughlin

Sterling slipped from a six-month high against a trade-weighted basket of currencies yesterday after European Commission President Jean-Claude Juncker and British Prime Minister Theresa May failed to reach an agreement on what the Border will look like post-Brexit.

Mr Juncker told reporters that despite significant progress during Mrs May's visit to Brussels, two or three open issues remained and "it was not possible to reach a complete agreement".

Sterling fell around a cent on the news, hitting the day's lows of $1.3415 but it recovered to finish almost flat on the day.

"Sterling has dipped more than fallen off a cliff," said Societe Generale macro strategist Kit Juckes. "I still think we react more to good news than to bad news.

"No deal today doesn't necessarily mean the end of the world if we've got a couple more days left .... We're not completely out of time, we're getting closer and there's a fair amount of good will for moving on to the next stage of negotiations," he added.

Sterling trimmed earlier gains against the euro to trade at 87.96 pence, still up around 0.4pc on the day.

Against the Bank of England's trade-weighted basket, though, sterling slipped to 78.8 from an earlier peak of 79.0 - its highest since mid-May.

At home, the ISEQ index of Irish shares closed up 1.35pc to close at 6,954.80. The key driver was a near 3pc rise in the heavily-weighted CRH, while Paddy Power Betfair gained almost 2pc.

Irish Ferries owner Irish Continental Group lost more than 2.5pc and was the biggest drag on the index.

In the US, bank shares and industrial conglomerates rallied and the dollar strengthened after progress on the Republican tax-overhaul plan spurred bets on higher corporate earnings.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business