Pound Falls As Trump Says May's Brexit Plan Dampens Chance Of U.S. Trade Deal
July 12 2018 - 11:49PM
RTTF2
The pound drifted lower against its major opponents in the Asian
session on Friday, as U.S. President Donald Trump remarked that
Prime Minister Theresa May's current 'soft-Brexit' proposal with
the EU would probably "kill" any future trade deals with the United
States.
In an interview with The Sun, Trump said that PM's "soft Brexit"
strategy would "affect trade with the United States, unfortunately
in a negative way."
"If they do a deal like that, we would be dealing with the
European Union instead of dealing with the U.K., so it will
probably kill the deal," Trump told the paper.
Meanwhile, Asian stock markets were mostly higher as investors
shifted focus to the upcoming corporate earnings season amid a lack
of escalation in U.S.-China trade tensions.
China's trade grew by double digits in June despite mounting
tensions with Washington, official data showed.
Exports climbed 11.3 percent year-over-year in dollar terms in
June, faster than the expected rise of 9.5 percent. Imports
advanced 14.1 percent from a year ago, well below economists'
forecast for a growth of 21.3 percent.
The pound edged down to 1.3196 against the franc, from a high of
1.3238 seen at 5:55 pm ET. If the pound continues its fall, 1.30 is
possibly seen as its next support level.
Reversing from an early high of 148.61 against the yen, the
pound weakened to 148.13. The next likely support for the pound is
seen around the 147.00 area.
Preliminary figures from the Ministry of Economy, Trade and
Industry showed that Japan's industrial production declined as
initially estimated in May.
Industrial production dropped a seasonally-adjusted 0.2 percent
month-over-month in May, reversing 0.5 percent rise in the previous
month.
Having advanced to 0.8834 against the euro at 5:00 pm ET, the
pound reversed direction and weakened to a 2-day low of 0.8858. The
pound is seen finding support around the 0.90 level.
The pound slipped to a 10-day low of 1.3151 against the dollar,
following an advance to 1.3206 at 5:55 pm ET. On the downside, 1.30
is possibly seen as the next support level for the pound.
Looking ahead, U.S. export and import prices and University of
Michigan's preliminary consumer sentiment index, as well as Canada
existing home sales, all for June are due in the New York
session.
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