Sterling climbed to a new seven-week peak against the greenback. Markets seized on UK’s Prime Minister warning that MPs’ failure to approve her Brexit deal could lead to a non-Brexit.
May’s EU divorce deal looks almost certain to be opposed by the parliament in a vote on Tuesday. However, Theresa May makes last-ditch efforts to garner MPs’ support for it. Blocking Brexit was now a more likely outcome than Britain leaving the European Union without a deal, she said.
May is expected to tell rebel MPs that Britain’s exit from the EU is now in peril from politicians seeking to thwart it.
The pound last week posted its fourth straight week in the black. However the British currency sharply on Friday on suggestions that Britain could seek to delay its scheduled Brexit date. Nonetheless it has also benefited from recent dollar weakness and last week from a fall in the euro.
It rallied to a high of $1.2879, up 0.3% on the day. Further against the euro it firmed 0.2% to stand at 89.06 pence by 1200 GMT, the highest since Dec. 5.
START TRADINGForex – Commodities – Seven-week peak for sterling on no-Brexit warning
The euro on Monday was relatively unchanged at $1.1464. The single currency lost 0.3% on Friday after data showed that Italy was at risk of recession.
The Australian and the New Zealand dollar, gauges of global risk appetite, fell on fears of a China’s economy slowdown. Such fears were prompted by a contraction in Chinese exports.
Market sentiment swung negative after data showed that China’s December exports unexpectedly fell. This pointed to weakness in the world’s second-largest economy and a gloomy growth picture. The data took its toll on the Australian dollar and New Zealand dollar, which both fell more than 0.4%.
Monday’s risk-off mood led traders to buy the safe-haven Japanese yen, which rose half a percent versus the greenback.
The dollar index was at 95.56, down 0.1 percent.
Oil prices slipped to around $60 a barrel after data showed weakening imports and exports in China, the world’s second-largest oil consumer.
Brent crude, the international benchmark, fell 46 cents to $60.02 a barrel by 1431 GMT, trading as low as $59.27 intraday. U.S. crude slipped 52 cents to $51.07.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.