The pound struggles to recoup some losses. The British currency rallied as much as nearly 0.5% on Friday. The pound dived on Thursday after Cabinet ministers quit in protest at May’s draft Brexit deal.
Sterling suffered its largest one-day drop in two years versus the euro and the dollar on Thursday. Trading on Friday was calmer, but the British currency depends on Brexit developments.
The resignations and May’s precarious position left investors panicking that Britain could exit the European Union without any agreement. May stuck to her plan and she will take Britain out of the EU in March.
Sterling was 0.3% higher at $1.2807. Versus the euro it strengthened 0.2% to at 88.465 pence. Analysts said the pound would remain under pressure.
Sterling fell more than 1% against the greenback and sank more than 1.5% against the single currency to €1.1309. Further, the British currency is set for its second biggest drop this year.
The pound rose but analysts say it remains under heavy pressure as the British leader fights for the Brexit deal. Investors predict more volatile days ahead.
Forex – Commodities – Pound struggles to recoup some losses
Mounting uncertainty over Britain’s Brexit deal with the European Union cast a shadow over foreign exchange markets on Friday.
The euro/dollar trading is in a tight range and the yen benefiting from demand for currencies deemed safer.
Currency markets are also keeping an eye on U.S.-China trade tensions. Traders looked for concrete signs Washington and Beijing are seeking to de-escalate their dispute.
The euro traded flat versus the dollar at $1.1336 while the dollar measured against a basket of currencies was unchanged at 96.954. That was not far off a 16-month high of 97.69 the dollar index had hit at the start of the week.
The single currency has rallied over the last three trading sessions. However, euro is only up 0.3% versus the dollar in the month to date.
The safe-haven Yen strengthened, changing hands at 113.22, up 0.3% on the day. The Brexit turmoil drew investors toward the Japanese currency. The yen had hit a six-week low of 114.20 on Monday before reversing course.
In commodities, oil prices rose on Friday on expectations that OPEC and its allies would agree to cut output next month. However, prices were still down on the week on concerns that the global market was oversupplied.
Brent was up $1.15 at $67.77 a barrel by 1150 GMT. The global benchmark looked set for a third day of gains since hitting an eight-month low on Tuesday. But it was still down more than 3 percent on last week’s close.
Sources: Reuters, CNN money, BBC
PLEASE NOTE The information above is not investment advice.