Pound Surges After U.K., EU Agree On New Brexit Accord

Date : 10/17/2019 @ 4:37PM
Source : RTTF2
Stock : United States Dollar vs Swiss Franc (USDCHF)
Quote : 0.992515  0.002215 (0.22%) @ 9:03PM
US Dollar vs CHF share price Chart

Pound Surges After U.K., EU Agree On New Brexit Accord

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2 Months : From Sep 2019 to Nov 2019

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The pound rallied against its key counterparts in the European session on Thursday, after the U.K. and the European Union concluded a new Brexit deal following days of intense negotiations, as EU leaders gather in Brussels.

The European Commission President Jean-Claude Juncker said the accord was "fair and balanced" and he would recommend the 27 EU member states to back it at the summit.

The deal places Northern Ireland in the UK's customs territory, while avoiding the need for a customs border between Ireland and Northern Ireland.

The UK Parliament will vote on the revised Brexit deal at an extraordinary sitting on Saturday.

But the Northern Irish party said they could not back the deal, due to gaps in customs and consent issues, as well as sales tax arrangements.

Data from the Office for National Statistics showed that UK retail sales remained flat in September.

Retail sales volume, including auto fuel, was unchanged from the previous month, following a 0.3 percent drop in August. Sales were forecast to fall 0.2 percent.

Survey data from the Bank of England showed that UK lenders expect the availability loans to the corporate sector to fall in the next three months to end-November, at the fastest rate since early 2008.

Bank of England expects the availability of credit provided to the corporate sector to fall 13.5 percent in the next three months, which is the worst decline since the first quarter of 2008.

The currency weakened in the Asian session as Northern Ireland's Democratic Unionist Party rejected its backing of Boris Johnson's current Brexit plan in its current form.

"As things stand, we could not support what is being suggested on customs and consent issues, and there is a lack of clarity on VAT (value-added tax)," the DUP said in a brief statement.

The pound neared the key 1.30 level against the greenback, surging 1.9 percent to a 5-month peak of 1.2990. That follows a drop to 1.2749 at 1:45 am ET. The pound had ended yesterday's trading session at 1.2828 against the greenback. The currency is likely to locate resistance around the 1.32 region, if it rallies again.

The pound soared 1.8 percent to near a 5-month high of 1.2893 against the franc, after falling as low as 1.2667 at 2:30 am ET. The pound was trading at 1.2760 per franc at yesterday's close. Further upward trading may see the pound challenging resistance around the 1.30 area.

After a brief drop to 138.62 against the Japanese yen at 1:45 am ET, the pound rallied 2 percent on the news, touching nearly a 5-month high of 141.51. At Wednesday's trading close, the pair was quoted at 139.52. Extension of the pound's uptrend may lead it to a resistance around the 143.00 region.

The pound was up by 1.2 percent at 0.8574 against the euro, its biggest since May 6. The rally in currency came after a fall to 0.8682 at 1:45 am ET. The euro-pound pair was worth 0.8628 at Wednesday's close. Next near term resistance for the pound could be possibly seen around the 0.84 level.

In today's events, U.S. weekly jobless claims for the week ended October 12, building permits, housing starts and industrial production, all for September, will be featured in the New York session.

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