Pound extends gains as Britain, EU push for Brexit deal
- Author: Darren Santiago Oct 20, 2019,
Oct 20, 2019, 0:47
The Euro reached new 7-week highs against the US dollar on Friday, lifted by optimism over a Brexit deal, a brighter outlook for US/China trade relations and high expectations for a Fed rate cut at the end of October.
"The (China) GDP print has weighed on short-term sentiment and we have seen regional stock markets and oil contracts edge lower because of that", said Jeffrey Halley, senior market analyst for Asia Pacific at brokerage OANDA.
The Chinese commerce ministry said on Thursday that China hoped to reach a phased agreement with the United States over trade as early as possible, and make progress on canceling tariffs on each others' goods.
As of the early afternoon, the currency fell below $1.28. "In recent days there have been discussions about a potential pause".
Speculation about a possible U.S. rate cut provided support to higher-yielding currencies against the dollar, with the Australian dollar 0.7 percent up and the South Korean won 0.2 percent stronger.
"If the Brexit deal goes through, there will be a bit of pressure on gold, because there are a few investors who bought gold on the Brexit story", Boele said.
Northern Ireland's Democratic Unionist Party announced Thursday it can not support Boris Johnson's Brexit plan due to concerns over "customs" and "VAT" issues, in a major blow to British Prime Minister Boris Johnson just hours before he is due to appear in Brussels for last-ditch talks on a Brexit agreement.
China reported growth of just 6.0 per cent in the third quarter, its slowest rate in almost three decades, due in part to a lengthy trade war with the United States. On the other hand, European Union officials appear cautiously optimistic that a deal can be drafted and approved by Thursday. Immediate resistance can be seen at 1.2989 (17th Oct high), an upside break can trigger rise towards 1.3052 (May 10th high).On the downside, immediate support is seen at 1.2811 (5 DMA), a break below could take the pair towards 1.2623 (9 DMA).
Turkish-led forces taken Syrian border town
The Turkey-backed fighters have denied her killing, saying they had not advanced that far, according to Reuters news agency. Turkey aims to set up a "safe zone" inside Syria to resettle numerous 3.6 million Syrian war refugees it has been hosting.
Following the news of a deal between the United Kingdom and the bloc earlier on Thursday, pound sterling hit a five-month high against the dollar of $1.30.
However, sterling then dipped under $1.29 as it became evident that Johnson faced an uphill task in getting the deal past lawmakers, with opposition MPs and some in his own Conservative party saying they were against it.
British Prime Minister Boris Johnson's career of disdain for the European Union was a thing of the past on Thursday as he and the bloc's leaders celebrated their long-sought Brexit deal. The Japanese yen JPY= strengthened 0.08% versus the greenback at 108.79 per dollar.
Brent crude futures settled up 49 cents at $59.91 a barrel.
This came after USA data showed retail sales falling for the first time in seven months in September, suggesting that manufacturing weakness could be spreading to the broader economy, while industrial output for last month also dipped.
US West Texas Intermediate (WTI) crude futures edged up by 35 cents to $54.28.
Three factors are now driving the U.S. Dollar lower: Optimism over Brexit, increasing chances of a Fed rate cut, and the lifting of hedges due to the possibility of a partial trade deal between the United States and China.
USA gold futures GCcv1 settled up 0.7% to $1,494 an ounce.