Sterling falls as Northern Irish party says it cannot support Brexit deal ‘as things stand’

United Kingdom Prime Minister Boris Johnson speaks at the United Nations (UN) Climate Action Summit on September 23, 2019 in New York City.

Efforts are continuing to hammer out a Brexit deal Thursday as European Union leaders gather for a summit at which they could approve a tentative withdrawal agreement.

That could prove very difficult with the Democratic Unionist Party (DUP), a group of politicians in Northern Ireland which are allied with the ruling Conservative Party, announcing that it could not support the deal as it stands.

That announcement sent sterling plunging more than 0.4% on Thursday morning, to 1.2765 against the dollar.

Brexit talks on Wednesday resembled a rollercoaster ride with reports at times suggesting a deal had been reached only to be countered with others suggesting that stumbling blocks had been encountered, causing volatile moves in sterling and U.K. stocks.

As talks continued into Wednesday night, EU officials and leaders appeared positive that an agreement was possible, even as time was running before an EU leaders summit in Brussels Thursday.

Michel Barnier, the EU’s chief Brexit negotiator, said there had been “good progress” in talks Wednesday evening and European Council President Tusk said that “the basic foundations of this agreement are ready and theoretically we could accept a deal.” German Chancellor Angela Merkel also said she was slightly more optimistic a deal could be reached.

Even if the EU agrees to a deal, U.K. Prime Minister Boris Johnson still needs to gain domestic support.