Pound Higher As Brexit Talks Resume

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The pound moved up against its key counterparts in the European session on Tuesday, as Brexit talks will resume in Brussels in an attempt to seal a deal by the October deadline.

U.K. top negotiator David Frost and his EU counterpart Michel Barnier will be attending a dinner, when they discuss outstanding issues on trade, governance and fisheries.

The UK and the EU need to complete a deal by the end of October for approval by the bloc’s 27 nations.

Frost remained optimistic, saying that a deal could be achieved in a matter of weeks.

A weaker dollar also underpinned the pound. The dollar index hit new lows amid falling yields, weak U.S. economic data and the U.S. political deadlock.

The pound spiked up to a 4-day high of 1.1935 against the franc and near a 2-week high of 1.3181 versus the greenback, after falling to 1.1858 and 1.3094, respectively in early deals. The pound is seen finding resistance around 1.22 against the franc and 1.34 versus the greenback.

The pound bounced off to 0.9031 against the euro and 139.17 against the yen, from an early low of 0.9062 and a 1-week low of 138.60, respectively. Immediate resistance for the pound is found near 0.88 against the euro and 141.00 against the yen.

Looking ahead, U.S. housing starts and building permits for July are set for release in the New York session.


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