Pound falls as talks break up without a deal

Excitement over progress in Brexit talks was short-lived, with the pound giving back gains after a meeting in Brussels broke up without delivering a deal.

Sterling fell into the red against the US dollar, down nearly 0.1% at 1.345, having traded as high as 1.353 in the early afternoon.

Versus the euro, the pound was up just 0.3% at 1.135.

In contrast, the FTSE 100 ended the day up 0.53% or 38.48 points at 7338.97.

The UK currency was knocked after a proposed solution for the Irish border was scuppered by fierce resistance from Northern Ireland’s Democratic Unionist Party.

It was hoped that an agreement would pave the way for much-anticipated trade talks between the UK and European Union.

David Madden, chief market analyst at CMC Markets UK, said the pound suffered a “choppy day”, having slipped back in the afternoon “as it became apparent that there would be no deal today”.

He added: “However, the tone of the May/Juncker press statement would appear to suggest that a deal could well be reached by the EU Summit next week, or before that if DUP concerns can be addressed, assuming that is where the deadlock is, which seems likely.”

Across Europe, the French Cac 40 jumped 1.36% while the German Dax tumbled 0.42%.

In oil markets, Brent crude prices dropped more than 1% to 62.92 per barrel, as investors reacted to a jump in the US oil rig count, which hit its highest level since September, according to data released by Baker Hughes.