Pound Falls On Brexit Concerns
The pound dipped against its major counterparts in the European session on Monday, as investors awaited Brexit talks resuming in Brussels in a last ditch effort to strike a trade deal between Britain and the European Union.
European Union chief Brexit negotiator Michel Barnier struck a downbeat tone about the prospects of striking a post-Brexit deal, saying the bloc’s national ambassadors that differences on the three main issues remained between the two sides.
Talks had stalled amid disagreements on issues related to fishing, governance rules and dispute resolution.
U.K. chief negotiator left for Brussels on Sunday to revive the talks and get an agreement in order to avoid a hard Brexit.
The British government is preparing to introduce a new piece of legislation this week that would override parts of the withdrawal deal.
Data from the Lloyds Bank subsidiary Halifax and IHS Markit showed that UK house price growth increased at a faster pace in November.
House prices grew 1.2 percent in November from October, when prices were up 0.3 percent. Economists had forecast prices to climb 0.5 percent.
The pound slipped to 0.9137 against the euro, its weakest level since October 20. The pound is seen finding support around the 0.92 level.
Data from Destatis showed that German industrial output grew more-than-expected in October, driven by the higher production of automobile and capital goods.
Industrial production climbed 3.2 percent month-on-month, faster than the 2.3 percent rise in September. Economists had forecast the monthly growth to ease to 1.6 percent in October.
The pound weakened to near a 3-week low of 1.3224 versus the dollar from Friday’s closing value of 1.3429. On the downside, 1.28 is likely seen as its next support level.
The U.K. currency was down against the franc, at a 4-week low of 1.1822. Next key support for the pound is seen around the 1.16 region.
The pound was lower versus the yen, at a 2-week low of 137.91. Should the pound continues its downtrend, 135.00 is likely seen as its next support level.
Looking ahead, Canada Ivey PMI for November will be out in the New York session.