The British pound has received a boost in today’s trading session over speculation that Ireland is hand in hand with British Prime Minister Theresa May on her plan to settle the border issue between Northern Ireland and Ireland.
The news comes at the end of the Tory party conference in Birmingham where Prime Minister May laid out her Brexit plan going forward which included a customs union between the whole of the UK and the EU which was well taken by her party members and goes a long way to avoiding a hard border between the 2 countries.
The news benefited the pound but the currency didn’t push as high as it should have regarding the news as the EU has yet to accept the respond to the deal offered by May.
"The pound has not weakened as feared during the week of the Conservative Party conference. In fact, it has been overshadowed by a report from the FT , which suggests that Ireland is backing PM May’s emerging plan for an all-UK customs union with the EU. Said says Lee Hardman, currency strategist with MUFG
“The EU would have to provide some encouragement as well that it is warming to the idea for the pound to stage a rally in the coming weeks," he added
The EU’s response will be the key for the British currency in the coming days and if they are to accept, it may set the stage for a rally on hopes that a deal on Brexit should finally eventuate.
Any rejection of the offer is likely to see the pound continue its recent downtrend.