The pound edged higher on Friday as strong British retail sales data lifted sentiment. However, investors were considering the consequences of a Brexit vote defeat in parliament for Prime Minister Theresa May.
On a weekly basis, the British currency was set for its third consecutive drop. Analysts said the latest defeat, although on a symbolic vote, indicates May does not have the support of her lawmakers.
With less than six weeks before March 29, May has stepped up efforts to convince the EU to grant her concessions. May has promised that if parliament has not approved a deal by Feb. 26, she will make a statement updating lawmakers on her progress on that day. Lawmakers will have an opportunity on Feb. 27 to debate and vote on the way forward.
However, the pound was set to end the week on a cheerful note. Data showed British retail sales rebounded strongly in January, shaking off some of the gloom over the economy.
The pound was holding near the day’s high, up 0.2% at $1.2822. It was broadly flat before the data.
Falling market expectations of an interest rate hike from the BoE this year are also weighing on the pound. Swap markets indicate a 28 percent probability of an interest rate hike compared to a third earlier this week.
START TRADINGForex – Commodities – British retail sales data lifted pound
The results of a meeting on Friday between U.S. Treasury Secretary Steve Mnuchin and China’s President Xi Jinping could be important for foreign exchange investors.
The dollar recovered on Friday after dismal U.S. retail sales and major currencies remained range-bound. The market awaited developments in trade talks between Washington and Beijing. The dollar remained fairly robust, trading up 0.2 percent at 97.1 against a basket of major currencies.
The euro was 0.2% lower at $1.1277. The single currency was headed for a second week of losses and down 1.7% year to date thanks to weaker-than-expected euro zone data.
Brent crude oil climbed above $65 a barrel to its highest this year. OPEC-led supply cuts and this week’s announcement of a higher than expected cut by Saudi Arabia encouraged investors. U.S. West Texas Intermediate crude futures were up about 1.7 percent, rising 91 cents to $55.32.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.