Brexit optimism propels the pound to multi-month highs
Written by Canarian Weekly Business
THE pound is roaring ahead so far, this year, with Brexit news helping to propel sterling to new multi-month highs, over the past couple of weeks.
This has seen GBP/EUR strike a 19-month high, as the pairing rose from €1.11 to €1.15, while EUR/GBP has fallen from £0.89 to £0.86. Meanwhile, GBP/USD has climbed from $1.28 to $1.32, while EUR/USD held at $1.14.
The pound has found considerable support in recent weeks, with GBP investors becoming increasingly confident that the UK will avoid a no-deal Brexit, despite MPs overwhelmingly rejecting Theresa May's EU withdrawal deal, earlier in the month.
The euro stumbled in the second half of January, because it was undermined by a mix of gloomy, Eurozone data, as well as increasingly dovish signals from the European Central Bank.
At the same time, the US dollar has found itself fluctuating in recent weeks, as the US government shutdown limited the release of domestic data, and resulted in USD becoming increasingly sensitive to external influences.
Brexit is to remain a key catalyst for movement in the pound in the coming weeks, with an upcoming parliamentary debate on Theresa May's “Plan B”, likely to be in the spotlight.
Meanwhile, the release of the Eurozone's latest GDP figures will likely be in focus for EUR investors, with the euro poised to soften, if growth remained subdued in the fourth quarter.
Finally, a temporary pause in the US government shutdown will result in a sizeable US data dump, over the next couple of weeks, potentially prompting some swings in the US dollar.
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