Gains for sterling observed in the Forex market following media reports regarding a crucial vote next week on Brexit deal.
The pound jumped to a day’s high of $1.2777 before losing ground. The DUP called May’s plans to offer concessions on provisions on Ireland’s post-Brexit border “meaningless”.
Against the euro, gains for sterling were observed as well. The pound rose 0.2% to a day’s high of 89.76 pence.
The British parliament is due to vote on the EU withdrawal bill on January 15. The issue is likely to dominate sterling trade in the run-up. May will lose the vote unless she convince opponents both within and outside her Conservative Party to back the deal.
The risk of sterling falling against the dollar is deemed the lowest in over six months, according to cable option pricing. Sterling’s relative strength in recent days is mostly down to dollar weakness. The pound’s performance against the euro has been more muted.
Further, the British currency will rise at least 4% if the UK’s parliament approves Theresa May’s Brexit deal according to a JPMorgan expert.
Οn the other side of the Atlantic, Chinese-U.S. teams ended trade talks in Beijing which lasted longer than expected. As U.S.-China trade talks conclude hopes have been raised once more.
START TRADINGForex – Commodities – Gains for Sterling on Brexit news
The bigger moves were in commodity-linked currencies, buoyed by the recovery in oil and hopes on U.S.-China trade talks.
The euro struggled to hold on to earlier gains as more weak economic data offset optimism over U.S.-China trade negotiations. The euro fell back to $1.1451 after earlier rising as high as $1.1479.
The dollar index traded down 0.1% at 95.847.
The Australian dollar considered a barometer of sentiment toward China, rose 0.4%to $0.7166. The Aussie has now risen off near-decade lows below $0.68 reached earlier this month.
Against the yen the dollar gained 0.2% to 108.905. The Japanese currency continued to weaken after a surge higher last week as investors shifted into the safety of the yen.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.