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Brexit Negotiation Hopes Continue to Boost Pound (GBP) Across the Board

Published: 30 Nov at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Ireland,

Pound Sterling (GBP)
The Pound continued its bullish run against most major currencies on Thursday as investors remained hopeful for progress in Brexit negotiations.

Since Tuesday, Sterling has seen much stronger demand due to news that the UK and EU were coming close to making a deal on the price of the Brexit ‘divorce bill’. Reports have also emerged that both sides of negotiations were closer to agreeing to the Northern Ireland border issue.

As the EU’s imposed 4th December deadline draws near, hopes are rising that the UK and EU will reach a deal for the Brexit divorce proceedings and this will lead to major progress in negotiations in December.

This would potentially unlock trade talks within the coming months and the Pound outlook would soar in this scenario.

Euro (EUR)
The Pound to Euro exchange rate continued to climb on Thursday, but the pair was unable to hold its best levels due to sturdier Euro trade in the afternoon.

Despite news that the Eurozone inflation projection rate failed to miss analyst expectations on Thursday, the Euro saw sturdy performance towards the end of the European session. Eurozone inflation was forecast to come in at 1.6% but only rose to 1.5% year-on-year. The yearly core inflation rate remained at 0.9%.

As the European Central Bank (ECB) already forecast that inflation would slow in 2018, this news was largely unsurprising to Euro traders, so it had little impact on the currency’s outlook.

Euro investors were more impressed by October’s Eurozone unemployment rate, which unexpectedly improved from 8.9% to 8.8%, its best result in nine years.

US Dollar (USD)
The Pound to US Dollar exchange rate saw strong gains on Thursday, taking the pair to its best levels in over two months.

While recent US data has been strong, investors are becoming anxious ahead of a key debate and vote on the Republican Party’s tax cut bill.

The tax plans are likely to be discussed in the Senate on Thursday and a vote is currently on track to be made on Friday. If the tax plan sees success, the US Dollar is likely to see stronger performance in the near-term.

Australian Dollar (AUD)
The Pound to Australian Dollar exchange rate has seen significant gains in recent sessions and currently trends near its best levels in over a year, as the Australian Dollar lacks support and Sterling traders become hopeful for progress in Brexit talks.

Australia’s latest building permit and business investment data was strong and slightly bolstered Australia’s economic outlook. However, with US tax uncertainty ahead and prices of iron ore slipping, risk-off movement has left the ‘Aussie’ largely unappealing.

New Zealand Dollar (NZD)
The Pound to New Zealand Dollar exchange rate surged higher from the week’s opening levels on Wednesday and Thursday morning saw the pair reach its best levels in over a year.

A surprising plunge in New Zealand business confidence, as well as low market demand for risky currencies, left the ‘Kiwi’ far weaker on Thursday.

ANZ’s November business confidence report dropped from -10.1 to -39.3. NZ building permits also fell, coming in at -9.6% in October.

Canadian Dollar (CAD)
The Pound to Canadian Dollar exchange rate reached its best levels in almost half a year on Thursday, as low demand for risky currencies as well as Brexit hopes helped Sterling to sustain easy gains.

Canadian data failed to give the ‘Loonie’ any support, but the Canadian Dollar was supported slightly by rising prices of oil, Canada’s most lucrative commodity.

Expectations that oil producers from OPEC member nations and some non-member nations would likely extend oil production cuts until the end of 2018 boosted market appetite for oil, which helped the Canadian Dollar to avoid further losses.
As of Thursday, 30th November 2017, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1373, GBP USD exchange rate was 1.353, GBP AUD exchange rate was 1.789, GBP NZD exchange rate was 1.9813, and GBP CAD exchange rate was 1.7446.
Patrick James About Author: (289 Posts)Patrick completed his economics degree just as the global financial crisis struck in 2008. In the intervening years Patrick has made his mark, climbing to a prominent position within a large financial services provider. As part of his role Patrick uses his expertise to advise companies of the best ways to safeguard against currency risk.

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