Brexit Deal Imminent? Pound Sterling Jumps against Euro and Dollar on Rumours of Imminent News

"Big buzz in the last hour among Tory MPs that the UK is heading towards a Brexit deal with the EU. Eurosceptics being reassured they will be happy," reads a tweet from Nicholas Watt, Political Editor BBC Newsnight.

The tweet has been picked up by market newswires, with traders and foreign exchange commentators we follow suggesting it is behind a rally in Sterling.

The Pound-to-Euro exchange rate has risen by three-quarters of a percent to quote at 1.1056 at the time of writing, the Pound-to-Dollar exchange rate has risen by 0.90% to quote at 1.3443.

Watt cautious that nothing is confirmed yet and MPs are saying "many a slip between cup and lip".

"But MPs being told the signal will come if and when Jacob Rees-Mogg announces that the commons will sit on Monday and Tuesday next week. That would come before any UK / EU announcement," says Watt.

That Rees-Mogg would announce Parliament would sit on the 21st and 22nd of December was actually doing the rumour mill this morning, but it appears a number of market participants wanted this rumour to backed up.

"Interesting to see an informal cabinet push to reassure veteran Brexiteers. They are being told their concerns have been addressed. Key issue is over the level playing field - a mechanism in which EU and UK would observe common rules but in a way that would respect sovereignty," says Watt, adding:

"Brexiteers being reassured that the UK has seen off unilateral punishment by the EU if the UK diverges from EU standards in future - the “lightening tariffs”. They are being told UK has negotiated a joint dispute mechanism. That could lead to punishment if one side loses".

While there does appear to be something afoot, other well connected journalists are urging caution.

"Nothing is imminent on Brexit tonight, according to sources, both sides are pretty certain nothing will happen immediately, a deal is very much still not there although the next few days have potential," says Bruno Waterfield at The Times.

Adam Parsons at Sky News says, "I know Westminster is apparently talking about an imminent Brexit deal but... I haven't heard anyone say that among Brussels diplomats".

Richard Colebourn, Europe Bureaux Editor at BBC News says "both British and European officials in Brussels are firmly briefing tonight that they don’t expect an imminent breakthrough on a Brexit deal."

Meanwhile newswires are saying that 'Brexiteers' in the Parliamentary Conservative Party want to see a deal by Thursday if they are to have time required to give a meaningful vote on it next week.

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