The British pound is pushing higher today as the market awaits the outcome of British Prime Minister Theresa Mays visit to Brussels to broker a deal on leaving the European Union.
Early indications coming out of the meeting suggest that the British PM has caved into demands from the EU about the border between Northern Ireland and Ireland which many had thought would be a major sticking point in negotiations.
This goes against what was said earlier in the day by Irish Minister for European Affairs Helen McEntee, who noted that there were still many unanswered questions about border control and until this is solved, things will be at a stalemate.
“I do not believe we are close to a breakthrough on the border question” the minister noted.
“It is absolutely impossible for us to allow the negotiations to move on to phase two when we don’t have an absolute concrete commitment form the U.K. government that we will not have a hard border on the island of Ireland,” she said.
By the time Prime minister may wraps up her meeting in Brussels, the pound could continue on its recent rally or come crashing down to earth as Brexit negotiations stall according to currency economist Lee Hardman from MUGF.
"If a green light is provided today for talks to move on to future relations, including a timely transition arrangement, it would open the door for further pound gains in the near-term," he said
"In contrast, the pound could weaken sharply if the EU still refuses to judge that sufficient progress has been made on divorce talks. (That) would increase the risk that Brexit talks will break down, and make a more disorderly Brexit outcome more likely." He added.
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