After climbing in yesterday’s trading session on the back of a draft agreement between the EU and the UK, the pound has pulled back after a threat by Spain to block the current Brexit deal.
If the deal is formally signed off on Monday the pound is likely to gather more momentum as we head to the last hurdle where the British Parliament will vote and have the final say on any deal
"The reaction itself is more telling than its magnitude. Optimism still remains in the market and sterling's ability to explode at the blink of an eye is captivating," Simon Harvey, a market analyst at Monex
Spain's Prime Minister Pedro Sanchez has said that Spain will not accept any deal that doesn’t take Gibraltar into consideration and needs to be included in the agreement
"As of today, if there are no changes with respect to Gibraltar, Spain will vote no to the agreement on Brexit," the Prime Minister said
It comes as a surprise that the pound actually fell on the News as Spain alone, cannot block any future Brexit deal and would need to get significantly more EU members on board to be successful
"Spain accounts for slightly more than 10% of the EU27 and represents only one member state. Therefore, it cannot block the deal alone. said Piet P.H. Christiansen, Senior Analyst with Dankse Bank.
It would mean 96.3% of the EU member states, representing nearly 90% of the EU27 population vote in favour of the deal." He added.