Spain Gibraltar Veto Hits Pound FTSE Up and Down

Published / Last Updated on 23/11/2018

A yo-yo day for UK markets today.

In early trading the pound dipped as Spain threatens to veto any UK/EU Brexit agreement.

Spain is threatening to block the UK/EU Brexit agreement wanting more power over Gibraltar as well as France demanding protected fishing rights in UK waters saw the pound weaken and dip against the dollar in morning trading.  A weak pound drives FTSE 100 up (large companies whose profits and therefore share prices are currency sensitive).

Confidence Returns, Pound Strengthens, FTSE 100 Falls

Later in the day, confidence returned as President of the European Council, Donald Tusk, tweeted that he expects the agreement to proceed with EU members are due to sign off the deal on Sunday without changes.  In addition, Theresa May remains firm that the EU will not renegotiate and is still 'wooing' MPs to her side stating that this is the only way forwards.  Result:  the pound strenghtened and FTSE 100 falls (it is nearly 0.5% down on the day) at the time of writing (2.35pm).

Comment

Spain simply does not have the financial muscle in Europe compared to the Franco/German alliance.  Spain will not veto.

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