Pound Falls As Brexit Talks Resume
November 09 2017 - 1:46AM
RTTF2
The pound dropped against its major rivals in early European
trading on Thursday, as investors focused on the Brexit talks
resuming in Brussels later in the day amid insufficient progress on
main divorce terms to move on to discussions of a future trade
deal.
Both EU and U.K. officials will meet for a sixth round of talks
over issues related to financial settlement, as well as rights for
EU citizens and the Irish border. Discussions on transition period
and the framework of a future trade relationship are also formally
on the agenda.
The EU leaders are insisting that the U.K. should agree to pay
€60 billion as the financial settlement before moving talks on to a
future relationship.
EU chief negotiator Michel Barnier warned that "more progress"
is needed on the first phase of the process.
European shares fell as U.S. tax reform worries and simmering
Middle East tensions kept traders on tenterhooks.
Survey by the Royal Institution of Chartered Surveyors showed
that the U.K. house price balance narrowed in October, gaining just
1.0 percent.
That missed forecasts for an increase of 4.0 percent and was
down from 6.0 percent in September.
The pound showed mixed trading in the Asian session. While the
currency rose against the greenback and the yen, it held steady
against the franc and the euro.
The pound pared gains to 1.3099 against the franc, from a high
of 1.3144 hit at 3:15 am ET. The pound is likely to find support
around the 1.28 area.
The pound dropped to a 3-day low of 1.3085 against the greenback
and near a 3-week low of 148.45 against the yen, from its early
highs of 1.3153 and 149.70, respectively. Continuation of the
pound's downtrend may see it challenging support around 1.29
against the greenback and 147.00 against the yen.
The pound fell to a 3-day low of 0.8870 against the euro, after
having advanced to 0.8824 at 3:30 am ET. Next key support for the
pound is seen around the 0.90 mark.
Data from Destatis showed that Germany's exports declined less
than expected in September, while imports dropped unexpectedly from
August.
Exports fell 0.4 percent month-on-month in September, reversing
a 2 percent rise in August. Shipments were forecast to decline 1.3
percent.
Looking ahead, at 8:15 am ET, the ECB executive board member
Yves Mersch speaks on "Turbulent times for the European financial
industry" at 1st annual forum Banking & Technology in Vienna,
Austria.
Half an hour later, the ECB Vice President Vitor Constancio
speaks at Rome regulatory conference.
In the New York session, Canada new housing price index for
September, U.S. weekly jobless claims for the week ended November 4
and wholesale inventories for September are due.
At 11:30 am ET, the Swiss National Bank Chairman Thomas Jordan
delivers a speech titled "Independence of Central Banks after the
Financial Crisis: The Swiss Perspective" at the Center for
Financial Studies Presidential Lecture, in Frankfurt.
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