Sterling Soares to 6-Week High as Brexit Talks Proceed

The pound sterling rose on Wednesday to a six-week high or 1.7% on against the US dollar after a report that Brexit negotiations are set to start again after a hiatus last week.

The sterling hit $ 1.3165, the highest level since September 8th, rising 1.2% against the euro to 90.25 pence.

"UK and the European Union (EU) aim to reach a new trade deal by mid-November," the report added.

Moreover, the pound headed toward a bullish path on Wednesday after the EU's Brexit negotiator, Michel Barnier, informed EU lawmakers that a trade deal with Britain is 'still possible'.

"A deal is "within reach" if the two sides worked hard to overcome disagreement tendencies in the coming days," Barnier said.

The UK and the EU agreed this week to make concessions to avoid a disrupted end to the Brexit drama that would add more devastation to the coronavirus crisis.

In addition, Head of corporate research at Societe Generale Kenneth Brooks  said Barnier's tone gave enthusiastic traders a reason to buy the British currency.

“The market wants to rally. Any positive soundbites that do come out are being jumped on as a reason to buy,” Broux said, adding that the market seeks recovery, and any Brexit positive news add gains to currency.

Also, the UK’s upper house rejection of the bill that angered the EU, which would give the British government the right to cancel parts of the Agreement, gave the pound an early boost.

It is noteworthy that the post-Brexit transition period ends in 10 weeks, on December 31.