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Oct. 15, 2019, 11:43 a.m. EDT

Pound surges on report of possible draft Brexit deal

FTSE 100 weighed in part by sterling strength

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By Barbara Kollmeyer, MarketWatch

The British pound jumped Tuesday, shaking off losses seen at the start of the week, on a report of a possible draft Brexit agreement.

A report from Bloomberg suggested the two sides were closing in on a preliminary deal. That report extended gains after relatively optimistic comments made by Michel Barnier, the top EU negotiator.

/zigman2/quotes/210561263/realtime/sampled GBPUSD 1.2840, -0.0012, -0.0934%

The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.0934% shot up to as high as $1.2796, after a level of $1.2606 seen late in New York on Monday. The currency lost ground Monday on fresh concerns the U.K. and EU won’t reach a deal by the Oct. 31 deadline after a weekend of talks didn’t yield a breakthrough.

Sterling saw its best two-day run in over a decade late last week. On Friday, it reached as high as $1.2706, its strongest since Theresa May was prime minister before Boris Johnson took over in July. Last Thursday, the pound saw its best single-day percentage gain since March.

A strong pound weighed on the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.15%  , which was trading almost flat despite gains for indexes across the U.S. and Europe. Given a chunk of U.K. companies derive revenue from outside the country, a stronger pound can hurt their bottom line.

Lloyds Banking Group /zigman2/quotes/202285510/delayed UK:LLOY -0.86%  and the Royal Bank of Scotland /zigman2/quotes/209265718/delayed UK:RBS -1.35%  each rallied over 5%, while multinationals including GlaxoSmithKline /zigman2/quotes/200381158/delayed UK:GSK +0.50%   and Unilever /zigman2/quotes/205449809/delayed UK:ULVR +0.92%  lost ground.

/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.2840
-0.0012 -0.0934%
Volume: 0.0000
Nov. 14, 2019 3:28a
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,339.88
-11.33 -0.15%
Volume: 17,844
Nov. 14, 2019 8:13a
loading...
/zigman2/quotes/202285510/delayed
UK : U.K.: London
59.08 p
-0.51 -0.86%
Volume: 3.86M
Nov. 14, 2019 8:13a
P/E Ratio
11.04
Dividend Yield
5.52%
Market Cap
£40.99 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/209265718/delayed
UK : U.K.: London
219.30 p
-3.00 -1.35%
Volume: 382,357
Nov. 14, 2019 8:12a
P/E Ratio
13.21
Dividend Yield
7.98%
Market Cap
£26.76 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200381158/delayed
UK : U.K.: London
1,729.00 p
+8.60 +0.50%
Volume: 268,734
Nov. 14, 2019 8:13a
P/E Ratio
18.92
Dividend Yield
4.63%
Market Cap
£85.09 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/205449809/delayed
UK : U.K.: London
4,668.00 p
+42.50 +0.92%
Volume: 35,317
Nov. 14, 2019 8:12a
P/E Ratio
15.00
Dividend Yield
3.03%
Market Cap
£120.56 billion
Rev. per Employee
N/A
loading...

Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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