A good week for the British and the common currency has just started. Pound rises after three weeks of losses while Euro gains as U.S.-China trade-talk optimism boosts sentiment.
Sterling drifted higher on Monday after registering three consecutive weeks of losses. Investors waited for the outcome of Brexit talks between Britain and the European Union. British Prime Minister plans to speak to every EU leader and the European Commission chief. She wants to seek changes to her EU withdrawal agreement, after another defeat from her own lawmakers last week. The symbolic defeat in Parliament has weakened her negotiating hand and increased the risk of a “no-deal” Brexit in 40 days.
Falling market expectations of an interest rate hike from the BoE this year are also weighing on the pound. Swap markets indicate a 28% probability of an interest rate hike compared to a third earlier this week.
The pound edged 0.1 percent higher at $1.2905. Against the euro it was broadly flat at 87.58 pence.
The euro rallied and riskier currencies strengthened on Monday as optimism over a breakthrough in U.S.-China trade war talks encouraged investors.
The euro has been stuck in a trading range against the dollar for several months. Growing weakness in the euro zone economy offset dwindling expectations the Federal Reserve will raise U.S. interest rates again this year.
After dropping to a three-month low on Friday, the euro has recovered helped by improved investor sentiment as hopes rose for an end to the U.S.-China trade conflict.
START TRADINGForex – Commodities – Good week started for pound and euro
Broader currency markets were quiet with U.S. markets shut for a holiday.
The euro ticked 0.3 percent higher to $1.1328, while the dollar index, which measures the U.S. unit against a basket of rivals, slipped 0.2% to 96.687 in a quiet session with U.S. markets closed for a holiday on Monday.
The Australian dollar, considered a barometer of global risk sentiment, rose 0.2 percent to $0.7154.
Brent futures were last down 6 cents at $66.19 a barrel, having touched a 2019 high of $66.83. U.S. futures were up 37 cents at $55.96 a barrel. Oil has risen nearly 25% so far this year and is on course for its strongest first-quarter performance since 2011.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.