EU and UK are likely to reach a deal on Brexit bill, buy GBP/USD?
Pound rallied against all G-10 currencies after The Telegraph reported UK and EU have reached an agreement on Brexit divorce bill, easing fears that discussions might end up in a deadlock.
- The Telegraph news media reported negotiators have reached an agreement-in-principle on EU’s demand for settlement, ahead of the meeting next week between both sides.
- UK 10-year bond price dropped to 124.00, the lowest this week, signalling an improvement in risk sentiment.
- GBP/USD scored a fourth straight weekly gain, rising 0.92%, 0.14% and 0.91% in the week of 24 Nov, 17 Nov and 10 Nov respectively.
- On the other hand, US key events last night were seen to be “generally negative” to the dollar. The earlier gains on USD/JPY were erased as North Korea’s media Yonhap News reported North Korea will make an important announcement at 0330 GMT, following the launch of a test-firing missile that analysts said may put the US east coast in range. This event could prove to be “dollar-negative”.
- Fed chairman nominee Jerome H. Powell said he doesn’t see an overheating economy and there might be more slacks in the labour market, when questioned by the Senate panel weighing his nomination to be Fed Chairman. The comments ruled out a much more aggressive tightening in 2018.
Fullerton Markets Research Team
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