Pound Advances After Cameron Secures a Deal at `Brexit' Summit

  • U.K. currency reverses earlier losses against the dollar
  • Prime Minister can call in-out referendum as early as June

The pound climbed the most in more than two weeks against the dollar as European Union leaders reached a deal aimed at keeping the U.K. in the bloc.

Sterling climbed for a second day as U.K. Prime Minister David Cameron said that he had negotiated a deal that gives his nation special status within the EU. In a Twitter post, EU President Donald Tusk said there was “unanimous support” for the proposal, which followed a two-day summit in Brussels. Cameron had been aiming to seal an agreement that he could sell to the British people in a vote that could be called as early as June.

"The market sees this as a positive," said Shaun Osborne, chief foreign-exchange strategist in Toronto at Bank of Nova Scotia. Even so, he advised clients to sell into the currency’s strength because "the deal is not the issue -- it’s whether Cameron can sell the deal at home."

The pound climbed 0.5 percent to $1.4406 as of 5 p.m. New York time, after earlier falling as much as 0.6 percent. It added 0.2 percent to 77.29 pence per euro.

With traders already pushing back bets on the timing of a Bank of England interest-rate increase, uncertainty about the details of the referendum had been causing further concern, helping push down the pound against most of its Group-of-10 peers this year. Securing concessions palatable to the British public may bolster Cameron’s chances of securing a vote in favor of remaining, while the announcement of a date would remove one aspect of ambiguity for traders.

A measure of traders’ expectations for price swings in the pound against the euro during the next six months closed at the highest since 2011 on Friday.

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