Sterling climbed to a new 3-1/2-month peak against the euro and added to gains versus the greenback on Brexit deal hopes.
There is wide optimism that Britain and the EU can reach a Brexit deal soon as they have made progress in their negotiations over Irish boarder. The European Union no longer expects a new proposal from Britain for the Irish border fix after Brexit.
According to Times, 30 to 40 lawmakers from the opposition party would be prepared to back the Brexit deal as well.
A European Parliament lawmaker dealing with Brexit sees a smaller risk now than before of failing to reach an agreement.
The British economy’s summer surge turned out to be stronger than expected. Warm weather prompted consumer spending and house building, official data showed on Wednesday.
The data is likely to reassure the Bank of England about the economy’s momentum as Brexit approaches in March.
Sterling edged up 0.1 % against the single currency at 87.43 pence per euro. Against the dollar sterling traded flat at $1.3142.
Forex Market – Brexit deal hopes: Sterling up to a fresh 3-1/2-month peak
The Euro traded flat close to 1.15$, far from 7-week lows after a fall in U.S. Treasury yields took some steam out.
Rising Treasury yields and concern about Italy’s public finances have fueled another rally in the dollar in recent sessions.
Further, against the yen, the dollar edged higher, trading up 0.2% at 113.20 yen.
Oil prices dropped after the IMF lowered its global economic growth forecasts. However, markets were supported as Hurricane Michael closed nearly 40% of U.S. Gulf of Mexico oil output. Further, U.S. sanctions restricted Iranian exports. Brent crude futures dropped by 40 cents a barrel, at 84.60$ a barrel. U.S. crude futures dropped by 35 cents a barrel from their last close.
Sources: Reuters, CNN money, BBC
PLEASE NOTE The information above is not investment advice.