The pound bounded for the second day in a row Friday as traders reacted with vigour to news that British Prime Minister Boris Johnson and Taoiseach Leo Varadkar had found a “pathway” to a Brexit deal.
The pound was up around 2.2 cents, or 1.9%, against the US dollar, to 1.2660. It marks a nearly 4% rise since before the two leaders met on Thursday afternoon.
Against the euro, the pound rose 1.4% to 1.1453.
Next week really needs to deliver the goods if the pound isn’t to suffer a nasty, nasty comedown
European Council president Donald Tusk lit a fire under the currency on Friday afternoon, saying he had seen “positive signals” from the meeting.
His statement “in and of itself sent sterling stratospheric”, said Connor Campbell, a financial analyst at Spreadex.
However, Mr Campbell said, the pound was rebounding from a five-week low on Thursday, and traders could be in for a shock next week.
“With the currency getting a bit carried away in the last 24 hours, next week really needs to deliver the goods if the pound isn’t to suffer a nasty, nasty comedown,” he said.