Sterling hits six-month high, stocks up as Brexit deal adds to Asian cheer

LONDON (Reuters) – A breakthrough in Brexit negotiations pushed sterling to a six-month high against the euro on Friday and added momentum to an upswing in world stocks underpinned by strong economic news from China and Japan.

Britain and the European Union struck a deal on Friday to move on to talk about trade and a transition period after they agreed the outline of their divorce.

Sterling was up nearly half a percent against the euro GBPEUR= to hit a six-month high and stock indices across the continent opened sharply up on the news.

“While agreeing a divorce bill has little economic significance for the price of sterling, the political significance of progress in Brexit talks is quite profound,” said Viraj Patel, an FX strategist for ING.

“It reduces the tail risk of a ‘no deal’ scenario and a complete breakdown in negotiations.”

Even Britain’s FTSE 100 Index, which normally falls when sterling rises because of high number of dollar earners on the list, edged higher.

Revised data showed Japan’s economy growing twice as fast as first thought as business spending jumped.

Gold steadied at $1,246.59 XAU=, having finally breached its recent tight trading range to hit a four-month trough at $1,245.60.

Oil prices rose as a threatened strike by oil workers in Nigeria forced a bout of short covering.

Brent futures LCOc1 was up half a percent at $62.50 a barrel, having climbed 98 cents overnight. U.S. crude CLc1 was up 20 cents at $56.86. [O/R]