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UK pound hits 3-week high on Merkel’s Brexit remarks

UK pound hits 3-week high on Merkel’s Brexit remarks

Mubasher: The UK pound (GBP) hit a three-week peak against the US dollar on Thursday, on German Chancellor Angela Merkel’s suggestion that a solution to the Irish “backstop” is possible ahead of the 31 October Brexit deadline.

Sterling jumped beyond $1.22, 0.75% higher in the session by 1:00 pm GMT.

By 4:13 pm GMT, the GBP/USD pair surged by 1.02% to $1.2254, while the EUR/GBP plunged by 1% to GBP 0.9048.

The UK currency plunged by more than 5% since the beginning of the year, and 14% since the 2016 referendum on leaving the European Union (EU).

“I said that what one can achieve in three or two years can also be achieved in 30 days,” Chancellor Merkel said.

“Better said, one must say that one can also achieve it by 31 October,” she added.

Merkel’s remarks build on a Wednesday speech with UK Prime Minister Boris Johnson, when she hinted that Brussels and London could reach a solution to the problematic Irish backstop in the next 30 days.

However, The 30 days were meant as an example to highlight the fact that we need to achieve it in a short time because Britain had said they want to leave the European Union on 31 October,” Merkel said, according to a translation by Reuters.