Pound Higher As U.K, EU Extend Brexit Talks

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The pound gained ground against its key counterparts in the European session on Monday, as U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen had agreed to continue talks beyond Sunday’s deadline in an attempt to reach a post-Brexit trade deal before the end of the year.

Johnson and von der Leyen agreed to “go the extra mile” and told their negotiating teams to resume the talks in Brussels.

European Union Brexit negotiator, Michel Barnier, said that a deal is “still possible” as both sides attempt to break deadlock on issues related to competition rules and fishing rights.

Traders are pinning hopes on a last-minute Brexit deal after trade talks have been extended again.

But Johnson played down expectations for a deal, telling businesses to get ready for a “no-deal” outcome when the U.K.’s transition period ends on December 31.

Investors focused on U.S. stimulus talks in Washington after a top Democrat signaled they might compromise to strike a agreement.

U.S. lawmakers plans to unveil a $908 billion coronavirus pandemic relief plan in two separate bills in a bid to win approval, which could be presented as early as today.

One will be a $748 billion proposal, which includes funding for small businesses, the jobless and COVID-19 vaccine distribution.

The second bill will have liability protections for business and $160 billion in state and local aid.

The pound spiked up to a 4-day high of 139.35 against the yen from Friday’s closing value of 137.47. The pound is seen locating resistance around the 142.00 level.

Final data from the Ministry of Economy, Trade and Industry showed that Japan’s industrial production rose more than estimated in October.

Industrial production grew a seasonally adjusted 4.0 percent month-on-month in October. In the initial estimate, output rose 3.8 percent.

The pound was up against the franc, at a 4-day high of 1.1900. The pair had ended Friday’s deals at 1.1751. On the upside, 1.21 is possibly seen as its next resistance level.

The pound approached 1.3437 against the greenback, setting a 5-day high. At Friday’s close, the pair was trading at 1.3218. The pound is likely to test resistance around the 1.36 level, if it advances again.

The U.K. currency jumped to 0.9045 against the euro, a 4-day high, and was up by 1.2 percent from last week’s closing quote of 0.9151. Immediate resistance for the pound is possibly seen around the 0.88 level.

Data from Destatis showed that German wholesale prices continued to fall in November driven by weak petroleum product prices.

Wholesale prices declined 1.7 percent year-on-year in November, but slower than the 1.9 percent decrease logged in October.

The material has been provided by InstaForex Company – www.instaforex.com

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