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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 1.2331, +0.0073, +0.5955%

The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.5955% 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 +1.10%  , 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 -1.46%  and the Royal Bank of Scotland /zigman2/quotes/209265718/delayed UK:RBS -1.54%  each rallied over 5%, while multinationals including GlaxoSmithKline /zigman2/quotes/200381158/delayed UK:GSK +1.99%   and Unilever /zigman2/quotes/205449809/delayed UK:ULVR +2.57%  lost ground.

/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.2331
+0.0073 +0.5955%
Volume: 0.0000
May 28, 2020 11:13a
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,211.88
+67.63 +1.10%
Volume: 751,677
May 28, 2020 3:58p
loading...
/zigman2/quotes/202285510/delayed
UK : U.K.: London
31.35 p
-0.47 -1.46%
Volume: 202.58M
May 28, 2020 3:58p
P/E Ratio
9.09
Dividend Yield
0.00%
Market Cap
£22.40 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/209265718/delayed
UK : U.K.: London
118.30 p
-1.85 -1.54%
Volume: 20.76M
May 28, 2020 3:58p
P/E Ratio
5.28
Dividend Yield
0.00%
Market Cap
£14.51 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200381158/delayed
UK : U.K.: London
1,681.40 p
+32.80 +1.99%
Volume: 4.67M
May 28, 2020 3:58p
P/E Ratio
15.65
Dividend Yield
4.76%
Market Cap
£82.11 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/205449809/delayed
UK : U.K.: London
4,308.00 p
+108.00 +2.57%
Volume: 1.45M
May 28, 2020 3:58p
P/E Ratio
22.94
Dividend Yield
3.33%
Market Cap
£109.88 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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