Pound stumbles and FTSE 100 rises on eve of Brexit deadline

Passengers on board the Larne to Cairnryan ferry crossing between Northern Ireland and Scotland look toward the port of Larne on October 4, 2020 in Larne, Northern Ireland.

Charles McQuillan/Getty Images

The pound and U.K. gilt yields slid on Wednesday, as a key Brexit deadline was nearly on top of markets, and tighter COVID-19 restrictions hit the country.

The pound

fell 0.3% to $1.2892, and the yield

on the 10-year U.K. gilt fell 2 basis points to 0.21% . The FTSE 100 index

climbed 0.5% as a weaker pound works in favor of multinationals who earn revenue abroad.

“Wire reports this morning indicate EU leaders will say at a two-day summit on Thursday-Friday, that not enough progress has been made for a deal to be reached and that they will step up no-deal preparations,” said Neil Wilson, chief market analyst for

“Britain’s own Oct. 15 deadline is tomorrow, although that won’t stop the discussions right up to December,” he said.

The U.K.’s chief negotiator David Frost reportedly told the House of Lords European Union Select Committee on Wednesday that they are “some ways with a deal,” with the EU.

“Traders should position for potentially large movement in sterling pairs in either direction, with very significant downside risk if the talks collapse for now with no outcome as the market looks poorly positioned for bad news,” added John J. Hardy, head of FX strategy at Saxo Bank, in a note to clients.

“The U.K. is also dealing with an ugly spike in COVID-19 cases and politicians may consider regional lockdowns to address the resurgence of the disease,” Hardy added.

England’s new three-tier COVID-19 restrictions kicked in on Wednesday, and travel-related stocks such as International Consolidated Airlines

and InterContinental Hotels

were under pressure.

Just Eat Takeawy


was a top gainer in London after the food-delivery service posted a 46% gain in online orders in the third quarter.

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