News that a Brexit deal, albeit still in draft form, was struck between the British government and the European Union was enough to provide a lift for the Pound Sterling. That news improved risk sentiment and gave investors the confidence to buy the Pound. Analysts offer a word of caution, however, and point out that this draft deal still needs to get approval from the British Parliament and that the Prime Minister may need to use all her powers of persuasion to receive the Parliamentarians’ blessing. Members of Parliament will be meeting tomorrow to discuss the merits of the draft.
As reported at 11:11 am (JST) in Tokyo, the GBP/USD was trading at $1.30, down 0.12% and moving away from the earlier high of $1.3036. The EUR/GBP is trading up 0.22% at 0.8688 Pence; the pair has ranged from 0.86674 Pence to 0.8710 Pence.
Dollar Outlook Improves
The US Dollar is coming under some pressure as well from the improvement in risk sentiment. Currency strategists expect that pressure to be short-lived given the outlook for the US economy, coupled with the Federal Reserve’s anticipated December rate increase. It’s position as a safe haven currency, especially relative to a weakening Japanese Yen, is also providing appeal to the greenback. The EUR/USD is currently trading at $1.13, up 0.13%, and off the session high of $1.13218.
