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Pound down again after Irish foreign minister dashes hopes of Brexit deal

MOSCOW, RUSSIA - JULY 2, 2019: Ireland's Tanaiste and Minister for Foreign Affairs and Trade Simon Coveney at a news conference following talks with Russia's Foreign Minister Sergei Lavrov. Mikhail Japaridze/TASS (Photo by Mikhail Japaridze\TASS via Getty Images)
Ireland's foreign minister Simon Coveney said an imminent Brexit deal was not likely. Photo: Mikhail Japaridze/TASS via Getty Images

The pound plunged on Friday and reversed earlier gains after Irish foreign minister Simon Coveney said that a Brexit deal was not imminent.

Asked on BBC radio about reports of significant progress in Brexit negotiations, Coveney said that “everyone needs a dose of reality”.

“We need to be honest with people and say that we’re not close to that deal right now,” he said.

The pound fell by 0.18% against the dollar (GBPUSD=X) to just over $1.25 on Friday.

The pound was down almost 0.18% against the dollar, reversing earlier gains. Chart: Yahoo Finance UK
The pound was down almost 0.18% against the dollar, reversing earlier gains. Chart: Yahoo Finance UK

The pound also fell by 0.10% against the euro (GBPEUR=X) to €1.13.

Though Coveney acknowledged that the “mood music” had improved between the two sides, he said there was still a “wide gap” between what the UK was proposing and what the EU could support.

“But there is an intent I think by all sides to try and find a landing zone that everybody can live with here,” he said.

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“We all want a deal, we all know that a no-deal will be a lose, lose, lose for everybody, but particularly for Ireland and Britain.”

“The pound has come sharply off overnight highs, allowing the FTSE to rebound again, after the Irish foreign minister dashed hopes a Brexit deal was imminent,” said Fawad Razaqzada, a market Analyst at Forex.com, in a note.

Earlier, the pound had hit a two-month high against the dollar, after European Commission president Jean-Claude Juncker said a Brexit deal was still possible.

Sterling has fallen in recent months as fears have grown of a damaging no-deal Brexit, but has rallied in recent weeks as the prospect of a no-deal Brexit has receded, mostly as a result of the rebellion in parliament.