Currency markets in Europe fluctuated on Friday morning after the U.K. made "sufficient progress" in its Brexit negotiations, with experts split on where sterling could trade in the coming months.
Sterling initially dipped on the Brexit announcement made from Brussels after jumping to 1.3514 against the dollar just prior to the announcement by European Commission President Jean-Claude Juncker. After falling to 1.3456 against the greenback at around 7:00 a.m. London time, it sharply rebounded to a session high of 1.3517. It then seesawed back down to below the 1.350 mark by 9:00 a.m. London time. Meantime, the euro fell to a six-month low against the British pound.
Nonetheless, sterling looks to advance in the short-term, according to Derek Halpenny, European head of global markets research at MUFG. He believes that Friday's market response did not equate to the importance of the U.K. getting beyond the first phase of negotiations. "The deal will help ease concerns over the uncertainty surrounding the cliff-edge risk associated with March 2019," he said in an emailed statement.