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Pound off TwoandaHalfYear Peak after Brexit Deal

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The pound hovered below a 212year high on Friday after Britain and the European Union struck a narrow Brexit trade deal, while overall sentiment in currency markets was tempered by a stalled U.S. coronavirus economic relief package.

The sterling last stood at 1.3549, having failed to rise above its 212year high of 1.3625 hit last week Britain clinched a Brexit trade deal with the EU, just seven days before it exits the worlds biggest trading bloc.

Against the euro, the pound fetched 89.80 pence per euro, after scaling a threeweek high of 89.54 on Thursday.

The British currency also hit a 312month high of 141.06 yen before easing to 140.22 on the Japanese currency, though trade was slow as many financial markets were shut for Christmas.

While the Brexit deal will preserve Britains zerotariff and zeroquota access to the blocs single market and avoid a damaging nodeal exit, it does not cover the nations much larger and influential finance sector. And, Brussels has made no decision yet on whether to grant Britain access to the blocs financial market.

It is important to recognise this is just the beginning of a new trading relationship that can be built on, wrote Gavin Friend, senior market strategist at National Australia Bank in London.

We also have to stand by for both sides to spin the deal in their respective ways designed for domestic consumption. Invariably the national press will respectively talk of wins versus the other side.

While the deal was a relief to…

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