CURRENCIES: British Pound Climbs As Likelihood Of Brexit Delay Rises

Date : 11/01/2019 @ 14h00
Source : Dow Jones News

CURRENCIES: British Pound Climbs As Likelihood Of Brexit Delay Rises

By Anneken Tappe, MarketWatch

The British pound strengthened against the U.S. dollar and the euro on Friday after U.K. newspaper The Evening Standard reported that a delay to the March 29 Brexit was becoming increasingly likely.

While the idea of a Brexit delay was refuted by Prime Minister Theresa May's government earlier this week, Friday's report said that May's cabinet ministers saw the likelihood of a delay rising (http://www.marketwatch.com/story/british-pound-jumps-after-news-report-says-brexit-delay-likely-2019-01-11). The pound climbed to $1.2811 in response, versus $1.2749 late Thursday in New York.

Sterling also strengthened against the euro , with one euro last buying GBP0.9003, down 0.2%

"Sterling's aggressive appreciation following the report continues to highlight how the currency remains extremely sensitive and highly reactive to Brexit headlines," wrote Lukman Otunuga, research analyst at FXTM.

The U.K. Parliament is slated to vote on May's Brexit deal on Jan. 15, but market participants are skeptical whether she will be able to shore up enough votes. The deal had initially been headed for a December vote, but was postponed under the assumption May would otherwise be defeated.

On Thursday, Labor Party leader Jeremy Corbyn said the Brexit deadlock demanded fresh elections.

Also read:Brexit Brief: Business lobby warns of risks to thousands of U.K. jobs (http://www.marketwatch.com/story/brexit-brief-business-lobby-warns-of-risks-to-thousands-of-uk-jobs-2019-01-11)

The U.S. dollar started the session on the back foot, with the ICE U.S. Dollar Index down 0.3% at 95.256, retracing Thursday's gains (http://www.marketwatch.com/story/dollar-inches-up-from-3-month-low-ahead-of-busy-economic-calendar-2019-01-10).

See:Big Mac Index shows the dollar is at its strongest in 30 years (http://www.marketwatch.com/story/big-mac-index-shows-the-dollar-is-at-its-strongest-in-30-years-2019-01-10)

Dollar traders are awaiting consumer price index data for December at 8.30 a.m. Eastern, which is expected to show a slight contraction.

In other U.S. news, Chinese Vice Premier Liu He will be in Washington (http://www.marketwatch.com/story/chinas-top-trade-official-expected-to-visit-us-for-trade-talks-mnuchin-says-2019-01-10) at the end of January to meet with trade representatives.

Also check out:BOE's Carney sees the U.S. dollar eventually losing its reserve-currency status (http://www.marketwatch.com/story/boes-carney-sees-the-us-dollar-eventually-losing-its-reserve-currency-status-2019-01-10)

In other major currencies, the euro strengthened to $1.1536, up from $1.1500, while the dollar weakened against the Japanese yen , buying Yen108.29, down 0.1%.

 

(END) Dow Jones Newswires

January 11, 2019 07:45 ET (12:45 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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