The British pound was unchanged on Friday at the end of its best week since January. Investors waited for next week’s parliamentary vote on Prime Minister Theresa May’s deal to exit the EU.
Sterling has rallied this week – it is up 1.7 percent against the dollar – after British lawmakers voted against leaving the EU without a deal and backed a delay to the March 29 exit date.
The vote against a no-deal Brexit was non-binding, but investors believe Britain will now avert a disorderly Brexit that would severely damage its economy. May has said she will hold another vote next week on her deal, although lawmakers have already rejected it twice. She hopes to use the threat of a longer delay to Brexit to persuade eurosceptics in her party to back her.
The pound, which has traded between $1.2945 and $1.3380 this week, remained unchanged on Friday at $1.3240. It was also little changed against the euro, losing 0.1% to 85.50 pence per euro. Uncertainty remains for sterling. All 27 EU member states must agree to a request for a Brexit extension, and it remains unclear when and on what terms Britain will leave.
START TRADINGForex – Best week for Sterling since January
Australian and the Kiwi dollars were the biggest gainers on news of more China stimulus plans.
The U.S. dollar broadly fell against its rivals on Friday and was on track for its biggest weekly drop in more than three months. Broadly, the greenback was on the back foot, before a U.S. central bank meeting next week where policymakers will shed more light on the outlook for interest rates. Against its rivals, the dollar fell 0.2 percent to 96.61. For the week, it is set to weaken 0.7 percent, its biggest drop since early December.
China will cut value-added tax (VAT) for manufacturing and other sectors on April 1, Premier Li Keqiang said on Friday. He promised to take more steps to boost its economy. That sent the Australian and the Kiwi dollar up by more than a quarter percent each against the greenback in a broadly quiet day in the currency markets after a volatile week.
The yen remained firm after the Bank of Japan kept monetary policy steady but tempered its optimism that robust exports and factory output will underpin growth, giving a boost to its perceived safe-haven status.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.