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Pound near 3-month high as dollar struggles; Brexit talks weigh

Thursday,   26-Nov-2020   02:51 PM (IST)

Sterling held near three-month high on Thursday as broadening U.S. dollar weakness offset some of the uncertainty over the outcome of Brexit talks. Traders are looking for progress on a trade deal between Britain and the European Union. A succesful deal is priced in, but fears persist that the discussions could break down. The head of the EU’s executive Commission on Wednesday reported “genuine progress” but said the risk of Britain leaving the EU without a deal on Dec. 31 remained. Sterling, in common with British stocks, has largely shrugged off finance minister Rishi Sunak’s unprecedented spending plans announced on Wednesday, as Britain looks to borrow some 400 billion pounds ($534.68 billion) to pay for the novel coronavirus’s hit to the economy. Sunak said on Thursday he was confident a trade deal could be struck. With just five weeks left until the United Kingdom exits the EU, both sides are trying to reach a trade deal that would avoid a tumultuous finale to the Brexit crisis. The pound was down 0.14% at $1.3364 in early London trading after hitting an early September high of $1.3399 in Asian trading. It slid slightly against the euro to 89.1 pence. With a lack of major scheduled news on Thursday, sterling traders will be watching for any official or unofficial news on the Brexit talks, traders said, with negative signals likely driving bigger price swings because a positive outcome is expected.