Pound down again after Irish foreign minister dashes hopes of Brexit deal

Edmund Heaphy
Finance and news reporter
Ireland's foreign minister Simon Coveney said an imminent Brexit deal was not likely. Photo: Mikhail Japaridze/TASS via Getty Images

The pound plunged on Friday and reversed earlier gains after Irish foreign minister Simon Coveney said that a Brexit deal was not imminent.

Asked on BBC radio about reports of significant progress in Brexit negotiations, Coveney said that “everyone needs a dose of reality”.

“We need to be honest with people and say that we’re not close to that deal right now,” he said.

The pound fell by 0.18% against the dollar (GBPUSD=X) to just over $1.25 on Friday.

The pound was down almost 0.18% against the dollar, reversing earlier gains. Chart: Yahoo Finance UK

The pound also fell by 0.10% against the euro (GBPEUR=X) to €1.13.

Though Coveney acknowledged that the “mood music” had improved between the two sides, he said there was still a “wide gap” between what the UK was proposing and what the EU could support.

“But there is an intent I think by all sides to try and find a landing zone that everybody can live with here,” he said.

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“We all want a deal, we all know that a no-deal will be a lose, lose, lose for everybody, but particularly for Ireland and Britain.”

“The pound has come sharply off overnight highs, allowing the FTSE to rebound again, after the Irish foreign minister dashed hopes a Brexit deal was imminent,” said Fawad Razaqzada, a market Analyst at Forex.com, in a note.

Earlier, the pound had hit a two-month high against the dollar, after European Commission president Jean-Claude Juncker said a Brexit deal was still possible.

Sterling has fallen in recent months as fears have grown of a damaging no-deal Brexit, but has rallied in recent weeks as the prospect of a no-deal Brexit has receded, mostly as a result of the rebellion in parliament.