This article was originally published on ETFTrends.com.
The British pound jumped against the U.S. dollar Wednesday after an European Union official revealed progress has been made in the ongoing Brexit negotiations.
Michel Barnier, the EU's chief Brexit negotiator, stated Europe is prepared to offer an unprecedented partnership to the U.K., CNBC reports.
"We respect Britain's red lines scrupulously. In return, they must respect what we are," Barnier said. "Single market means single market ... There is no single market a la carte."
European Union Summit
Less than two months are left until the October European Union summit that was expected to mark the Brexit deal. There has been growing concern of a no-deal exit as the two negotiating parties grow closer to the deadline.
"This acknowledgement from Barnier that they are prepared to offer a partnership that has never existed with another third country – a significant shift from the previous position that the UK must choose a pre-existing model in any future relationship – suggests the EU is ready to soften its opposition on certain issues in order to speed up negotiations," Craig Erlam, senior market analyst at OANDA, said in a note.
The uncertainty surrounding the Brexit deal weighed on the British pound in recent weeks.
U.K. citizens voted to exit the European Union in June 2016, and the two sides began negotiations last year.
"Looking further ahead, our strong conviction remains that we think the UK is headed for a soft-Brexit, which will ultimately take GBP/USD above $1.40 over the medium term. We think the institutional and political constraints to a no-deal are sufficiently large to prevent such a scenario," Kamal Sharma, director of G10 FX strategy at Bank of America Merrill Lynch, said in a note.
For more information on the U.K., visit our United Kingdom category.
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