March 28, 2024

Pound rallies as no-deal Brexit fears retreat

LQDFX Forex news Blog Pound rallies as no-deal Brexit fears retreat

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Pound rallies for second day posting biggest two-day surge in 10 months as Brexit fears retreat. Lawmakers voted to force Prime Minister Johnson to seek a 3-month delay to Brexit if he failed to secure a transition agreement.

British lawmakers approved legislation on Wednesday to extend the Brexit deadline for the third time. They also rejected Prime Minister Boris Johnson’s motion to hold a snap election.

Political uncertainty remained high — Johnson renewed his efforts to seek an election next month after a first attempt was defeated on Wednesday. But market was relieved that at least a no-deal Brexit seemed to be averted.

The British currency rose 0.4% to above $1.23, its highest since Aug. 28. It built on an overnight 1.4% surge; its biggest one-day jump since March. The pound has been shunned by investors in recent weeks as concern grew that Britain would have a no-deal Brexit. On Monday, it fell to below $1.20.

Despite the rebound, the British currency remained more than 8% below March’s 2019 highs of nearly $1.34. Fears an election is the only way to break the political deadlock weighed.

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Forex – Pound rallies as no-deal Brexit fears retreat

Risky currencies flourished on Thursday as investors turned more optimistic that the United States will find common ground with China on trade. The U.S.-China agreement to hold high-level talks in October eased fears that an escalating trade war could trigger a global economic recession

The dollar, seen by many as immune to Sino-U.S. trade spats, was slightly higher against both the euro and five other major currencies. Euro/dollar was last at $1.1052, up 0.2%.

The yen slipped to a three-week low of 106.75 against the dollar. The yen was last down 0.1% at 106.555, though overall the Japanese yen had been rising this year.

The Australian dollar, a currency particularly sensitive to global trade tensions, rose to a one-month high of 0.68255 against the U.S. dollar. It was last up 0.3% at $0.6815.

The New Zealand dollar rose to a nine-day high of $0.6385.

Oil prices rose to $61 a barrel on Thursday as hopes of progress in resolving the U.S.-China trade row boosted investor sentiment. But a report showing U.S. crude inventories unexpectedly increased weighed on prices.

Benchmark Brent crude was up 60 cents at $61.30 a barrel by 1324 GMT, having earlier fallen to $60.25. U.S. WTI crude added 30 cents to $56.56.

PLEASE NOTE The information above is not investment advice.

Sources: Reuters, Investing, CNN money