Forex – Dollar Holds Steady and Pound Dips Amid Brexit Uncertainty
November 15, 2018
The dollar held steady against a currency basket on Thursday, while the British pound dipped amid uncertainty over whether Prime Minister Theresa May's draft Brexit plan will win parliamentary approval.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was little changed at 96.70 by 3:40AM ET (08:40GMT).
Fed Chair Jerome Powell on Wednesday expressed confidence in the U.S. economy and said that markets will have to get used to the idea that the central bank could raise rates at any time starting in 2019.
Elsewhere, the pound was on the backfoot, with GBP/USD changing hands at 1.2965, pulling back from a high of 1.3071 on Wednesday.
Sterling had strengthened after May said she had obtained enough support from senior members of her Cabinet for a draft Brexit deal to move forward.
But the pound slipped lower amid doubts over whether the draft withdrawal agreement will get parliamentary approval. It is unclear when that vote might happen.
The euro was a shade higher against the pound, with EUR/GBP at 0.8750, well above the five-month lows of 0.8655 reached on Tuesday.
Meanwhile, the single currency gained against the dollar, with EUR/USD at 1.1342, not far from an overnight high of 1.1351.
The single currency's gains were capped by concern over how European Union officials would react to Italy's latest budget proposal.
The dollar was a touch lower against the yen, with USD/JPY at 113.47.
Signs that the U.S. and China may be taking steps to de-escalate their bitter trade dispute helped lift sentiment.
Looking ahead, U.S. retail sales for October will be released at 8:30AM ET