LONDON: Sterling was on course for its third consecutive week of gains against the dollar on Friday, driven by renewed hopes that Britain and the European Union will reach a trade deal. Britain left the EU in January and is in talks with the bloc on a future trading relationship after a transition period runs out at the end of 2020.
An EU official said the two sides are very close to agreement on most issues, even if they are still at odds over fishing rights, guarantees of fair competition and ways to solve future disputes. European Commission President Ursula von der Leyen pointed to progress on "important files".
A spokesman for Prime Minister Boris Johnson also reiterated that Britain wants to secure a trade deal as soon as possible, but it needs respect the country's sovereignty. The EU and British officials' words reassured investors that negotiations are still ongoing after chief Brexit negotiators suspended direct talks on Thursday when a member of the EU team tested positive for Covid-19.
The pound gained 0.3% to 89.23 pence per euro at 1600 GMT, and it was on course for its second week of gains against the European single currency. Versus the dollar, sterling was up 0.2% at $1.3287, on track for its third consecutive week of gains.