CURRENCIES: Dollar Headed For Worst Week In A Month; Sterling Hit After Theresa May's 'no Deal' Comment
September 21 2018 - 3:02PM
Dow Jones News
By Anneken Tappe
The U.S. dollar strengthened in Friday trading but still looked
set for its worst weekly performance in a month, while the British
pound was pushed sharply lower after Prime Minister Theresa May
spoke about the possibility of a "no deal" Brexit.
The ICE U.S. Dollar Indexwas 0.4% stronger at 94.257 on Friday
but headed for a 0.7% weekly decline, its worst in a month.
Shorter-dated U.S. Treasury yields were on the rise on Friday
(http://www.marketwatch.com/story/10-year-treasury-yield-steadies-as-focus-shifts-to-fed-gathering-2018-09-21),
with the 2-year yieldrising to 2.821% and the 10-year yieldholding
above 3%, which lent some support to the greenback.
On the Brexit front, European Union leaders rejected the U.K.'s
post-Brexit proposal
(http://www.marketwatch.com/story/uk-leader-theresa-may-under-pressure-after-eu-leaders-rebuff-her-brexit-plan-2018-09-21),
adding pressure for the prime minister, whose Conservative Party is
holding its annual conference next week.
May then said in a speech that the U.K. must and will continue
to prepare for the possibility of a "no deal" Brexit in which the
U.K. leaves the European Union without an agreement governing its
future relationship in place.
"Theresa May's statement came in line with what we expected, a
reminder of where we are with negotiations and a summary of the
frustrations for the U.K. team," said Nomura strategists led by
Jordan Rochester. "But the market did not like its tone during the
early part and has yet to recover as the fast money had been
building longs in sterling over the past couple of days."
The next Brexit summit is scheduled for November, but this
week's talks in Salzburg, Austria, seem to have soured the mood
amid both politicians and investors.
The British poundwas thus unable to hold on to its gains from
earlier in the week
(http://www.marketwatch.com/story/dollar-slides-as-british-pound-and-new-zealands-kiwi-rally-on-data-2018-09-20)
when hopes for a Brexit resolution had been high, and sharply
dropped to its lowest since last week. Sterling last fetched
$1.3076, down from $1.3268.
Read:Far-right candidate leads Brazil's polls as investors worry
about reforms, ailing real
(http://www.marketwatch.com/story/far-right-candidate-leads-brazils-polls-as-investors-worry-about-reforms-ailing-real-2018-09-20)
Elsewhere in Europe, Italy's governing coalition is under
pressure as the leader of the 5 Star Movement has threatened to
leave over public spending that would widen the deficit. 5 Star
leader Luigi di Maio and Northern League leader Matteo Salvini have
clashed with Finance Minister Giovanni Tria over Italy's budget
plans. Investors are awaiting the budget proposal, which some worry
won't be in line with the EU requirements and could lead to a spat
between Rome and Brussels.
The eurowas modestly lower at $1.1743, compared with $1.1779
late Thursday in New York.
Among other currencies, the Canadian dollarbriefly dipped versus
its U.S. rival, following comments from White House economic
adviser Kevin Hassett that the U.S. was "very, very close" to going
ahead with a trade deal with Mexico alone and excluding Canada,
according to a Reuters report
(https://www.reuters.com/article/us-trade-nafta/us-very-close-to-proceeding-with-mexico-only-trade-deal-trump-adviser-idUSKCN1M11SH).
The countries have been renegotiating the North American Free Trade
Agreement since August last year.
The greenback last bought C$1.2925, down from its Friday high of
C$1.2945.
Meanwhile, the buck bought 18.8042 Mexican pesos , down from
18.8275 late Thursday.
(END) Dow Jones Newswires
September 21, 2018 14:47 ET (18:47 GMT)
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