Pound Advances On Brexit Talks
January 17 2019 - 5:10AM
RTTF2
The pound strengthened against its major counterparts in the
European session on Thursday, as investors awaited developments on
Brexit talks after Prime Minister Theresa May's government had
survived a vote of no confidence on Wednesday.
Hopes of no-deal Brexit appeared to have diminished, after
Labour opposition leader Jeremy Corbyn said he would not meet May
unless a no-deal is off the table.
Following the win, the PM began talks party leaders and other
MPs for discussions to get a Parliamentary consensus and break the
Brexit stalemate.
May is scheduled to "table an amendable motion and to make a
statement about the way forward" next Monday, with a debate on the
motion due on January 29.
Investors are pricing for a softer Brexit on reduced hopes of a
no deal Brexit taking place on March 29.
Survey data from the Royal Institution of Chartered Surveyors
showed that UK housing market is set remain sluggish over the
coming three months as sales expectations sunk to a two-decade low
amid weaker outlook for prices, thanks to the persistent
uncertainty surrounding Brexit.
Home sale expectations for the next three months decreased to
-28 percent, which was the weakest reading since the series began
in 1999.
The currency traded mixed against its major counterparts in the
Asian session. While the pound dropped against the yen and the
greenback, it held steady against the euro. Against the franc, it
advanced.
The pound bounced off to 140.61 against the yen, from a low of
139.52 hit at 3:15 am ET. The pound may possibly challenge
resistance around the 143.00 area.
The U.K. currency hit a 3-day high of 1.2924 against the dollar,
after falling to 1.2832 at 3:15 am ET. If the pound rises further,
1.31 is possibly seen as its next resistance level.
Data from the Labor Department showed that first-time claims for
U.S. unemployment benefits unexpectedly showed a modest decrease in
the week ended January 12.
The report said initial jobless claims edged down to 213,000, a
decrease of 3,000 from the previous week's unrevised level of
216,000. Economists had expected jobless claims to inch up to
220,000.
Having dropped to 0.8870 against the euro at 3:15 am ET, the
pound firmed to near a 2-month high of 0.8818. On the upside, 0.86
is likely seen as the next resistance for the pound.
Data from the Eurostat showed that Eurozone consumer price
inflation slowed in December to its lowest level in eight
months.
The consumer price index rose 1.6 percent year-on-year following
a 1.9 percent increase in November.
Reversing from an early low of 1.2730 against the franc, the
pound spiked up to near a 2-month high of 1.2830. The pound is
likely to challenge resistance around the 1.31 area.
In today's events, at 10:45 am ET, Federal Reserve Governor
Randal Quarles will deliver a speech at the Insurance Information
Institute's annual forum in New York.
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