Edinburgh: The pound jumped as investors seized on comments from senior government ministers in the U.K. and Europe that suggested the nation may find a way to retain access to the single market as part of its exit from the European Union.
The UK currency climbed more than 1% against the dollar, reaching the highest since 11 November as Brexit Secretary David Davis said the UK would be ready to consider making contributions to the European Union in order to secure the best possible access for trade in the single market. Dutch Finance Minister Jeroen Dijsselbloem told the Times of Malta that the U.K. might be able to participate in the internal market, though at a cost.
“If the UK does stay in the single market, it’s very likely that sterling will go up,” said Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London. The comments “very much shift the pendulum away from hard to soft Brexit. Embedded within a soft Brexit is access to the single market one way or another.”
The pound climbed 1.1% to $1.2639 as of 11.30 am London time. That pared its losses since the 23 June vote to exit the EU to 15%. Bloomberg