The pound slipped on Friday after survey data showed British factories slashing jobs in February. However, pound sets for biggest weekly rise in a month as no-deal Brexit fears fade.
The British currency surged to multi-month highs this week. Theresa May said lawmakers would get to vote on a Brexit delay if they choose not to approve her withdrawal agreement. Traders backed off forecasts for a no-deal Brexit and began to expect a delay of the departure date beyond March 29.
That has ignited a rally in the pound and traders said barring a surprise, the pound was set to extend gains in the near term.
Adding to the general tone of optimism over the near term were comments by British policymakers.
BoE Governor said this week the central bank would probably give more support to the economy if it suffers the shock of a no-deal Brexit.
With the risk of no deal dwindling, implied volatility gauges, a measure of expected swings in the pound, extended their drop across the board. The pound edged 0.2% lower at $1.3240. For the week, it is up 1.5%. Against the euro, the pound was down by a similar magnitude at 85.88 pence.
START TRADINGForex – Commodities – Pound heads for biggest weekly rise
The dollar edged higher on Friday, reaching a 10-week high against the yen, as investors searching for higher yields flocked to U.S. Treasuries. The yen was the main casualty of the dollar’s rise, losing as much as 0.5% to 111.98 yen, a 10-week low. Against a basket of other currencies, the dollar rose 0.1 percent to 96.202.
The euro was little changed after data showed underlying inflation in the euro zone remained subdued. The euro recovered earlier losses and rose 0.1%, keeping it in the trading range against the dollar where it’s been stuck in for several months.
The Australian dollar rose 0.3% to $0.7115 as investors’ mood improved. It had dropped on Thursday after disappointing Chinese manufacturing numbers.
The Canadian dollar rose 0.3% to C$1.3131. The loonie has strengthened in 2019 on higher crude oil prices and as appetite for risk has rebounded.
Sources: Reuters, Investing, CNN money
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