Investing.com - The pound surged higher on Thursday following reports that the UK and the European Union have reached an agreement on a draft text outlining future EU-UK ties post-Brexit.
The pound jumped to the highs of the day against the dollar, with GBP/USD hitting highs of 1.2927, before easing back to 1.2903 by 05:40 AM ET (10:40 AM ET).
Bloomberg reported that the draft text says that the EU and the UK will commit to 'deep' customs cooperation and build on 'single customs territory'. The EU is to recognize UK's independent trade policy and the transition period can be extended for up to "one or two years".
European Council President Donald Tusk said on Twitter that he sent “a draft Political Declaration on the Future Relationship between EU and UK” to the 27 EU member states. He added that the text had been agreed by negotiators and at the political level, subject to the endorsement of EU leaders.
British Prime Minister Theresa May was set to make an announcement to Parliament at 14:30 GMT.
The pound was also higher against the euro, with EUR/GBP down 0.67% to 0.8849.