Pound Slides Ahead Of May-Junker Meeting
February 20 2019 - 1:18AM
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The pound declined against its major counterparts in early
European deals on Wednesday, as the UK Prime Minister Theresa May
is set to meet the EU Commission chief Jean-Claude Juncker in
Brussels for further Brexit negotiations.
Juncker dampened hopes for any breakthrough in talks on Tuesday,
saying that there are no enough signs of progress on Brexit to
expect the meeting to be productive.
The U.K. will depart from the European Union on March 29 but has
yet to strike a deal outlining divorce terms and future trade
rules.
There are rumors that three Tory lawmakers are set to quit the
Conservative Party as early as Thursday and join the "Independent
Group" of eight former-Labour MPs.
Anna Soubry, Sarah Wollaston and Heidi Allen are reportedly
planning to resign from the Tory party amid divisions in handling
of Brexit and general direction of the party.
European stocks held steady as hopes for a Sino-U.S. trade deal
continued to build and British Prime Minister Theresa May ditched a
radical Brexiter plan to save her EU exit deal.
Investors also awaited the Federal Reserve's policy meeting
minutes due later in the session for clues on policymakers'
thinking on interest rates and its balance sheet reduction
policy.
The currency was higher against its major counterparts in the
Asian session, excepting the euro.
The pound declined to 1.3026 against the greenback, from more
than a 2-week high of 1.3076 hit at 8:45 pm ET. The next possible
support for the pound is seen around the 1.29 level.
Having advanced to a 2-1/2-month high of 145.04 against the yen
at 8:45 pm ET, the pound reversed direction and dropped to 144.32.
The pound is poised to target support around the 141.00 level.
Data from the Ministry of Finance showed that Japan logged a
merchandise trade deficit of 1,452.2 billion yen in January.
That missed expectations for a shortfall of 1,029.5 billion yen
following the 56.7 billion yen deficit in December.
The pound edged down to 1.3038 against the franc, after rising
to a new 3-week high of 1.3088 at 8:45 pm ET. If the pound drops
further, 1.29 is likely seen as its next support level.
The U.K. currency reversed from an early high of 0.8676 against
the euro, falling to 0.8712. Next likely support for the pound is
seen around the 0.89 area.
Figures from the Federal Statistical Office showed that
Germany's producer price inflation eased for a second straight
month to its lowest level in eight months in January.
The producer price index rose 2.6 percent year-on-year in
January, following a 2.7 percent in December. Economists were
looking for 2.20 percent inflation.
Looking ahead, at 10:00 am ET, Eurozone flash consumer sentiment
index for February is due.
The Fed will release minutes from January 29-30 meeting at 2 pm
ET.
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