Brexit Deal Optimism Drives Pound, UK Bank Stocks Higher

Fecha : 11/10/2019 @ 07:29
Fuente : Noticias Dow Jones
Emisora : Barclays Plc (BARC)
Cotización : 173.44  1.94 (1.13%) @ 10:35
Barclays Cotización de acciones Gráfica

Brexit Deal Optimism Drives Pound, UK Bank Stocks Higher

Royal Bank Of Scotland (LSE:RBS)
Gráfica de Acción Histórica

6 Meses : De Jul 2019 a Ene 2020

Haga Click aquí para más Gráficas Royal Bank Of Scotland.
   By Anna Isaac and Caitlin Ostroff 

Signs of optimism that the U.K. could reach a divorce deal with the European Union drove the pound and U.K bank stocks sharply higher Friday.

Sterling climbed as much as 1.7% against the U.S. dollar on talk of a breakthrough between the two sides after months of worsening relations, causing investors to review their bets on the currency losing further value. U.K. bank stocks rallied hard with shares in Royal Bank of Scotland Group PLC (RBS.LN) and Lloyds Banking Group PLC (LLOY.LN) rising more than 10% and Barclays PLC (BARC.LN) gaining 5%.

Investors attributed the sharp rise to positive remarks from Donald Tusk, European Council President. He said that the Irish taoiseach and the UK prime minister "saw for the first time a pathway to a deal."

"I have received promising signals from the taoiseach that a deal is still possible," Mr. Tusk said Friday.

Analysts agreed that there were still hurdles to be overcome in the Brexit process in order for a deal to be sealed prior to the Oct. 31 deadline. However, "something meaningful" had clearly been accomplished in the meeting between Leo Varadkar and Boris Johnson, Derek Halfpenny, head of research global markets at MUFG Bank said.

A deal is more likely to be passed by parliament than previous attempts because key euroskeptic groups of lawmakers believe Mr. Johnson could pursue a looser long-term relationship with the EU than his predecessor Theresa May.

However, while the pound climbed 1% on the signs of the breakthrough, it is still unlikely to return to pre-referendum strength. The currency has still lost close to 17% of its value against the U.S. dollar since the vote, and the greenback has gained in strength in recent years, analysts said.

"Looking at the longer-term picture, we are still very much in the range for sterling that we've been in for the three-year period," John Wraith, head of U.K. rates strategy at UBS Group AG, said. UBS still expects the value of the pound to be in a range of $1.05 to $1.50 in scenarios ranging from a hard Brexit to a new referendum and the U.K. remaining in the EU.

"Most likely is this what we're calling the middle ground where we sort of limp around with one extension after the other or we then get a deal that sees the U.K. go into transition," he said.

UBS has started recommending that clients stay light on risk for the pound and put options--a type of insurance against sudden changes in price moves--against the euro or dollar as it expects that to react to Brexit headwinds in the future.


Write to Anna Isaac at and Caitlin Ostroff at


(END) Dow Jones Newswires

October 11, 2019 08:14 ET (12:14 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
Su Consulta Reciente
Fibra Prol..
América Mó..
IPC México
United Sta..
Las acciones que ha visto aparecerán en este recuadro, lo que le permite volver fácilmente a las cotizaciones que ha consultado previamente
Registrarse ahora para crear su lista personalizada de acciones en streaming.

Cotizaciones PLUS están en tiempo real. Cotizaciones NYSE y AMEX están con retraso de por lo menos 20 minutos.
El resto de las cotizaciones están con retraso de por lo menos 15 minutos al menos que se indique lo contrario.

Al acceder a los servicios disponibles de ADVFN usted acepta quedar sujerto a los Términos y Condiciones

P: V:mx D:20200126 15:28:13