Sterling jumps as Irish backstop hopes added to Brexit optimism


On Friday, the 13th of September 2019, the British currency extends its histrionic rally that started off last week after UK House of Commons voted to approve a bill aimed at sending UK’s new leader Boris Johnson to EU Commission as early as next month to seek an extension of Brexit deadline up to January 31st.

Meanwhile, Friday’s (September 13th) rally of Great Britain Pound, which so far surged 1.13 per cent to $1.2475 against its American counterpart during late US trading hours, was almost entirely prompted by a media report revealing that the largest political party of Northern Ireland had agreed to accept some of the EU Commission rules followed by a Brexit, which eventually rekindled hope of a potential Irish backstop and buoyed up investors’ sentiment.

Aside from that, as risks of a no-deal Brexit seemed to be evaporated for the moment being, a growing number of traders had entered into a long-buy position for the British currency amid hopes of averting a no-deal Brexit, which eventually spiked Pound Sterling 1.64 per cent higher this week following a gain of 1.11 per cent last week, while the British currency gained 2.75 per cent this month so far, its largest monthly gain since January this year.

Meanwhile, adding that the investors had begun to scrap short-sell position for Pound Sterling as Johnson was highly unlikely to deliver a no-deal Brexit, a FX and Global Macro strategist at Arkera, Viraj patel said on Friday (September 13th), “All those Boris shorts are beginning to bail as they realise he can’t deliver no-deal (Brexit). ”


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