Pound Firms Tentatively on Lifting of French Blockade

Sterling firmed on Wednesday after three days of falls as France lifted a partial border blockade aimed at stopping the spread of a fastspreading new COVID19 strain, and hopes grew of a postBrexit trade deal despite discouraging comments from both sides.

Just eight days before the United Kingdom casts off into the unknown by exiting the EUs orbit, no trade deal has yet been sealed though an array of conflicting signals indicate, variously, that a deal is imminent or that talks have far to go.

The pound has been pummelled this week also by the imposition of rigorous new shutdowns across Britain to combat the new virus strain and the decision by many countries to shut travel and freight from the UK.

However, the lifting of the blockade by France will finally allow trucks stranded at the border to start leaving Britain.

The UKFrench supply chain restrictions look to soon be back in play whilst the market remains increasingly convinced of a deal with just the fisheries hurdle, all of which is pushing sterling higher across the board, said Neil Jones, head of FX sales at Mizuho.

But he predicted volatility to stay high because of continued uncertainty over the Brexit outcome.

By 0850 GMT, sterling was up 0.3 against the dollar at 1.3423, off an earlier high of 1.3442, though it had fallen as low as 1.3190 on Monday. Against the euro, it was up 0.2 at 90.84 pence.

Pound implied volatility remains extremely high compared to other developed currencies, with overnight…

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