Sterling took a wild ride after top EU official Donald Tusk said that the “time is practically up” to reach a Brexit deal.
Sterling tumbled to $1.2409 in a matter of minutes from just above $1.25 on Tusk’s comments. It recovered back to $1.2480 as his comments unfolded, talking about “promising signals” from the Irish prime minister that a deal was possible.
The chief Brexit negotiators of the EU and Britain met on Friday. The British and EU negotiators were meeting at the EU Commission’s Brussels headquarters for breakfast talks. Efforts are made for a Brexit transition deal that has long proved elusive at an Oct. 17-18 summit.
This came hours after Prime Minister Boris Johnson and his Irish counterpart unexpectedly said they had found a pathway to a possible deal at last-ditch talks. A surprise breakthrough in Brexit negotiations with Ireland opened the door for a smoother exit for Britain from the European Union. In a joint statement, the British and Irish leaders said they could “see a pathway to a possible deal”.
Sterling had been at 3-week high after its best day since March, ahead of the meeting between Britain and EU negotiators. Versus the euro, the pound also dropped off a near a three-week high, sliding to 88.68 pence from 88.05.
Sterling surged to a three-month high as investors rushed to price in the prospect of a last-minute Brexit deal between the European Union and Britain.
START TRADINGForex – Wild ride for Pound on Tusk’s Brexit comments
Hopes of progress in U.S.-China trade talks held down the dollar and lifted riskier currencies on Friday. Optimistic comments from Europe on Brexit boosted the British pound.
The dollar was a shade weaker versus its rivals at 98.655. The greenback has emerged as an alternative safe-haven during the U.S.-China trade war. The dollar was a little weaker against the Australian and New Zealand dollars as well as the euro
The Australian and New Zealand dollars led gains against the greenback. The Australian dollar was up 0.5% at 0.6796 per U.S. dollar after rising to a two-week high of 0.6804 overnight. The kiwi edged higher to $0.6320.
Improved risk appetite pushed the safe-haven yen lower to 108.28 per dollar, its weakest since Oct. 1, as investors’ risk appetite improved.
The euro edged up 0.3% to $1.1033, mirroring the three-week high it reached on Thursday against the dollar.
The pound dipped to a one-month low against the euro ahead of a meeting between the British and Irish leaders. Versus the euro, sterling was at 90.03 pence, after touching lows of 90.07. Brexit outcomes remain unclear just three weeks before Britain is due to leave the European Union. The pound climbed 0.3% against a broadly weak dollar, last trading at $1.2238.
Gold prices held steady on Friday. Support from a weaker dollar was offset by optimism over talks on U.S.-China trade ties and a Brexit deal. But gold was on track to post a weekly loss. Spot gold was steady at $1,493.52 per ounce at 1019 GMT and were set to post a weekly decline of about 0.6%.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money