British Prime Minister Boris Johnson said: “We have a great new deal that takes back control.”

The announcement pushed the pound as high as 1.2990 against the US dollar, and EURGBP fell as low as 0.8575. But at the time of writing the pound had given back part of these gains to trade 0.6% higher against the USD at 1.29 and only 0.1% stronger against the EUR at 0.8615. This reaction reflects the fact that further twists and turns in the Brexit story are likely in the next few days.

Amid the optimism about a deal, it is important to remember that the agreement still has to be agreed to by the EU27 heads of state as well as the UK parliament. As things stand, parliamentary ratification is far from certain. Support for the revised agreement has not been forthcoming from Northern Ireland’s Democratic Unionist Party, which is likely to be needed to get the deal over the line.

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