Pound hovers at 5-month highs ahead of crunch Brexit deal vote

Pound hovers at 5-month highs ahead of crunch Brexit deal vote

Pound hovers at 5-month highs ahead of crunch Brexit deal vote

The Pound rallied again Friday amid celebrations of an ebbing in "no deal" Brexit risk and as Prime Minister Boris Johnson returned from Brussels proclaiming a new deal, but the British currency has more upside potential against the Dollar than Euro, according to Skandinaviska Enskilda Banken (SEB).

"The reaction from the markets shows they want to get this deal over and they are ready to push the button at the slightest sign of a deal", said Morten Lund, a senior FX strategist at Nordea.

The Pound rose against the Canadian Dollar as the President of the European Commission, Jean-Claude Juncker said the United Kingdom and EU reached a "fair and balanced agreement".

In early trade, London added 0.1 percent but was weighed by the stronger pound, while Paris eased 0.3 percent and Frankfurt edged 0.1 percent lower. At (2047 GMT), the Canadian dollar was trading almost unchanged at 1.3121 to the greenback.

The dollar index, which compares the dollar against six major currencies, was down 0.31%.

"Reportedly, about 20 Labour MPs are considering backing the deal, fearing that otherwise they will lose their seats in a pre-Brexit general election".

Investor focus was shifting to the United Kingdom where Northern Ireland's Democratic Unionist Party said it could not support the Brexit deal as it now stands. - The British pound extended losses on March 20, 2019 after Prime Minister Theresa May requested European Union leaders to delay Brexit until June 30, sparking greater uncertainty over the nation's departure from the bloc.

On the daily chart below, it seems clear that the general trend of the EUR / USD continues to be bullish, as the pair holds steady above the 1.1000 psychological resistance, and successfully tested the 1.1085resistance, the highest in a month.

Housing Secretary Robert Jenrick told BBC television: "We always knew these negotiations were going to be hard and we're going to go down to the line". -China trade talks on Thursday, the US released a number of economic data reports, ahead of speeches from a pair of Federal Open Market Committee members.

Negotiators were struggling to clinch an 11th-hour deal, raising the chances that Johnson will have to seek an extension of the October 31 deadline for Britain's exit from the bloc.

It drifted lower against the euro to $1.1072 and was steady against the Japanese yen at 108.75.

But he also said there were no plans for another high-level meeting on the trade deal outlined last week.

Benchmark Brent crude oil futures LCOc1 settled down 49 cents to $59.42 a barrel.

"Perhaps we've found a restive equilibrium until we get a fresh macro driver", said Tai Wong, head of base and precious metals derivatives trading at BMO.

Bleak Chinese economic data also soured risk appetite, with the Shanghai Shenzhen index .CSI300 falling 1.2%.

By the end of the European business day, the pound was pretty much back to where it started. Meanwhile, if parliament supports the deal and the EUR/GBP rate falls to 0.8350, the Pound-to-Euro rate would likely rise to 1.1976.

Spot gold was down 0.2% at $1,489.02 an ounce at 1143 GMT.

In another sign the trade dispute is dragging on economic growth, data from China showed its third-quarter economic growth slowed to its weakest pace in nearly three decades.

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