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Sterling near six-week high as no-deal Brexit risks recede

Wednesday,   11-Sep-2019   02:19 PM (IST)

The British pound steadied just below a six-week high on Wednesday after its recent rebound, as investors assessed the chances Prime Minister Boris Johnson can strike a Brexit deal with the European Union. Johnson said on Tuesday he would not request an extension to Brexit beyond the Oct. 31 deadline. Hours earlier, a law had come into force demanding that he delay Brexit until 2020 unless he can reach a transition agreement with the EU. Johnson’s team wants Brussels to tweak an existing withdrawal agreement so parliament can approve it and Britain won’t crash out of the EU without a deal on Oct. 31. Investors, calculating the risk of no-deal Brexit is receding, have pushed sterling from under $1.20, the three-year low it reached early last week, to as high as $1.2385 on Monday. On Wednesday, sterling rose to $1.2369. It gained 0.2% to 89.20 pence per euro. The pound has also been supported this week by better-than-expected economic data, which confounded earlier expectations that the UK would fall into recession this quarter.