Sterling is on fire as it extended gains on Tuesday. Hopes renewed among traders after the British cabinet office minister said a Brexit agreement was possible in the next days.
Sterling jumped as high as $1.2929 from around $1.2870 before Lidington’s comments, up more than 0.5% on the day. The pound rose 0.3% versus the euro to 87.04 pence.
The pound on Monday had hit its lowest, at $1.2827, since Nov. 1 against the dollar. Versus the euro it remains close to a 6 1/2-month highs of 86.91 pence touched last week.
The British currency dipped on Monday on fears negotiations with Brussels on the terms of Brexit were deadlocked. Less than five months left before Britain’s official departure date of March 29, 2019
The single currency edged up from a 16-month low on Tuesday as some investors consolidated positions. However, concerns about Italy’s budget proposals, poor German data and Brexit negotiations squeezed out broad appetite for the euro.
Against the dollar, the euro edged 0.3% higher at $1.1229, above a June 2017 low of $1.1216. It has fallen nearly 7% so far this year, more than halving its gains from last year.
Tuesday is the deadline for Italy to resubmit its budget proposals to the EU.
Forex – Commodities – Sterling is on Fire on comments that Brexit is close
An overnight rally in the dollar stalled, with the greenback edging slightly lower to 97.628 against its major traded rivals. It had hit 97.70 in the previous session, its highest since June 2017.
The Japanese yen traded at 113.99 on Tuesday, as the greenback gained 0.1 percent versus the yen. The yen touched a six-week low of 114.20 on Monday.
Analysts believe the yen will strengthen if global risk sentiment worsens, thanks to its safe-haven status.
Oil prices fell more than 2% on Tuesday after U.S. President put pressure on OPEC not to cut supply. Brent dropped $1.97 a barrel, or 2.8%, to a low of $68.15 before recovering to around $68.72, down $1.40. U.S. light crude CLc1 was $1.30 lower at $58.63. Both crude benchmarks have fallen more than 20% since peaking at four-year highs in early October.
Sources: Reuters, CNN money, BBC
PLEASE NOTE The information above is not investment advice.