Pound Climbs On Brexit Deal Optimism

The pound strengthened against its major counterparts in the European session on Monday, as the odds of a ‘no deal’ Brexit reduced after the U.K. sought another Brexit delay from the European Union.

Investors remained hopeful that Britain would be able to avoid a disorderly exit from the European Union despite a cross-party group of politicians voting to postpone the “meaningful vote” on Prime Minister Boris Johnson’s new divorce deal.

The government is planning to hold a new vote on its Brexit deal today.

But the opposition MPs are likely to table amendments that seek customs union with the EU or a referendum on the deal.

Data from IHS Markit showed that UK households’ perception of financial wellbeing remained negative in October but the assessment improved from September.

The household finance index rose to 44.4 from 43.1 in the previous month. This was the highest score since January.

The currency dropped against its major counterparts in the previous session, excepting the franc.

The pound climbed to a 4-day high of 0.8579 against the euro, from Friday’s closing value of 0.8598. The next possible resistance for the pound is seen around the 0.84 mark.

Data from Destatis showed that Germany’s producer prices declined in September for the first time in nearly three years.

Producer prices fell 0.1 percent year-on-year in September, reversing a 0.3 percent rise in August. Economists had expected the price to decrease 0.2 percent.

The pound appreciated to 1.3013 against the greenback, its biggest since May 13. The pound is likely to find resistance around the 1.32 level, if it rises again.

Rebounding from a low of 139.47 hit at 6:15 pm ET, the pound strengthened to a 4-day high of 141.36 against the yen. The pound is likely to challenge resistance around the 143.00 mark.

Figures from the Ministry of Economy, Trade and Industry showed that Japan’s all industry activity remained unchanged in August.

The all industry activity index remained unchanged month-on-month in August, after a 0.2 percent rise in July. Economists had forecast a modest 0.1 percent fall.

Following a decline to 1.2679 at 6:15 pm ET, the pound firmed to a 4-day high of 1.2819 against the franc. The pound is seen finding resistance around the 1.32 level.

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