Sterling sees wild swings as Brexit talks enter final hours

The British pound has seen a wild day of trading amid reports of progress and obstacles during a last day of Brexit talks between the U.K. and EU. Negotiating teams from both sides are still locked in discussions with hopes that a deal could be reached before a crucial EU summit later this week.

A deal needs to be reached Wednesday if it stands any chance of being approved by the EU, and then by the U.K. Parliament at the weekend. If a deal is not approved by October 19, U.K. Prime Minister Boris Johnson is legally obliged to ask the EU for an extension to the current departure date of October 31.

On Wednesday afternoon, sterling rose above $1.28 on a report that the main obstacle to a Brexit deal had been removed. It briefly touched a new five-month high of $1.2840 after a reporter for Irish broadcaster RTE, citing European Union sources, said opposition from Northern Ireland’s Democratic Unionist Party (DUP) to new Brexit proposals had been overcome. This was later dismissed by the party’s leader, however.

If a deal is reached, EU leaders will have to ratify it at their summit on Thursday and Friday, then it will have to be approved by a majority of U.K. lawmakers at a special parliamentary summit on Saturday. The European Parliament would also have to approve any Brexit deal too. British MPs had rejected a Brexit deal arrived at by previous Prime Minister Theresa May three times largely because of objections to the Irish “backstop.”