Sterling headed for its worst week in more than two years on Friday as Brexit woes are still around. Worries grow about whether a deal can be secured before the December 2020 hard deadline.
More than three years since Britain voted to exit the EU in a 2016 referendum, it will leave the political bloc at the end of January. He has set Dec. 2020 as a hard deadline to reach a trade agreement, knocking sterling. Familiar fears of a chaotic British exit from the European Union, while firm data helped the dollar arrest its recent slide.
Cable has given up all the gains won after Prime Minister Johnson’s re-election last week and has slumped 2.3% against the dollar since Monday. It has fared even worse against the euro, headed for its largest weekly loss since July 2017.
Britain’s pound strengthened, having tumbled sharply from around 19-month highs against the dollar hit last week. A resounding election win for the ruling Conservative Party boosted hopes that near-term Brexit uncertainty would end.
Overnight the pound slipped below $1.30 for the first time in a fortnight. The pound was up in early London trading, holding just above $1.30, as investors waited for the BoE to announce its new governor.
The British currency was 0.2% firmer at $1.3030 and up 0.4% at 85.14 pence per euro. Still, the currency was headed for its biggest weekly losses against the dollar and euro in over two years.
Also, the British parliament will vote on UK Prime Minister Boris Johnson’s Brexit withdrawal agreement bill. Since Johnson’s government has a large majority, the bill is expected to pass easily. The bill differs from the version presented to parliament in October. It prohibits the extension of the transition period beyond 2020.
START TRADINGForex – Brexit woes still weigh on pound
Data this week has fuelled expectations that the U.S. Federal Reserve is unlikely to cut interest rates again in the near future. Trade was generally subdued ahead of the Christmas and New Year holiday period.
The dollar firmed against other major currencies on Friday. The greenback was set for its best week in six weeks thanks to a stronger tone to economic data that makes a near-term cut in U.S. interest rates unlikely. The dollar index was a touch firmer at 97.54. It has recovered almost 0.9% from five-month lows hit last week and is up 0.4% this week. The US currency poised for its biggest weekly rise since early November.
The dollar was a shade firmer against the safe haven yen at 109.39.
Against the Swiss franc, the dollar was 0.25% firmer at 0.98085 francs, rebounding from four-month lows hit against the safe-haven currency this week.
The euro weakened a quarter of a percent to $1.10930.
Oil prices were set for a third straight weekly gain despite a Friday fall after easing U.S.-China trade tensions lifted the outlook for global economic growth.
Brent was down 17 cents at $66.37 a barrel by 1311 GMT, equivalent to a weekly rise of around 1.8%. U.S. West Texas Intermediate crude was down 20 cents at $60.98 per barrel, a gain of around 1.5% on the week. Volume of oil trade remained thin in the pre-Christmas wind down.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money