Pound Drops as Brexit Hopes Fade; Dollar Treads Water
Investing.com - The British pound fell on Thursday as hopes for a last minute Brexit deal were dealt a blow, while the dollar nursed losses amid persistent doubts over prospects for a mooted U.S. - China trade deal.
Sterling was down 0.4% to 1.2780 by 03:23 AM ET (07:23 GMT) after Northern Ireland's Democratic Unionist Party said it could not support the Brexit deal being proposed by Prime Minister Boris Johnson and the European Union, a serious blow to Johnson just hours before the bloc's leaders meet at a summit.
The euro was up 0.45% against the pound at 0.8662.
The U.S. dollar, which had dropped on Wednesday as U.S. retail sales fell for the first time in seven months, was hovering near overnight lows as optimism about an announced "phase 1" of a trade deal with China ebbed in the absence of details.
U.S. and Chinese trade negotiators are working on nailing down text for the first phase of the trade deal for their presidents to sign next month.
"Even if a deal is signed, it remains uncertain if the obligations can be fully met on both sides," strategists at Singapore's DBS Bank said in a note.
The euro edged up to 1.1076 against the U.S. currency. The greenback was little changed against the Japanese yen at 108.79.
The U.S. dollar index, which measures the greenback against a basket of currencies, was at 97.75, not far from the one month low of 97.61 reached overnight.
The Australian dollar gained ground, rising 0.4% to 0.6783 after robust employment data overnight eased pressure on the country’s central bank to cut interest rates again at its upcoming meeting in November.
--Reuters contributed to this report
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