Pound Strikes Five-month Peak Above $1.30
Muhammad Irfan 24 days ago Mon 21st October 2019 | 07:42 PM
The pound hit a fresh five-month peak above $1.30 Monday on renewed Brexit optimism after Prime Minister Boris Johnson requested another extension to Britain's scheduled departure from the European Union
At about 1230 GMT, the pound reached the highest level since May at $1.3013.
The euro was down at 85.92 pence.
"Markets (are) starting to price in a best-case scenario in terms of the deal getting passed this week and then a short extension to pass any necessary legislation," CMC Markets analyst Michael Hewson told AFP.
"Whether that optimism turns out to be premature is another matter; only time will tell." Johnson was Monday attempting again to push his EU divorce deal through parliament and avoid the political damage of delaying Brexit beyond next week.
"The main driver (for the pound) is hope of a Brexit extension being more likely, which could result in a better exit deal potentially to be negotiated than is currently on offer," said Accendo Markets trader Samuel Springett.
Since spiking above $1.30 in the morning London session, sterling has wobbled around that level.
"Dealers seem to be watching bonds closely as we have seen decent moves down -- with yields higher -- across the board.
"The market seems to believe a no-deal (Brexit) is now off the table so we may yet see further gains in the pound." Elsewhere, Asian equity markets mostly rose but there was little major movement in reaction to China's top trade negotiator Liu He saying at the weekend that Beijing and Washington had made "substantial progress" towards wrapping up a partial trade deal announced earlier this month.
On Wall Street, the main indices opened higher, with the Dow adding 0.2 percent in the first minute of trading.
"US stocks are adding to last week's gain in early action, with US-China trade optimism lingering and the markets eyeing this week's ramp-up of" the third quarter earnings season, said analysts at Charles Schwab brokerage.
- Key figures around 1330 GMT - Pound/dollar: UP at $1.2993 from $1.2984 at 2100 GMT on Friday Euro/pound: DOWN at 85.92 pence from 86.00 pence Euro/dollar: DOWN at $1.1160 from $1.1167 Dollar/yen: UP at 108.47 Yen from 108.45 yen London - FTSE 100: UP 0.3 percent at 7,170.38 points Paris - CAC 40: UP 0.5 percent at 5,662.07 Frankfurt - DAX 30: UP 1.2 percent at 12,780.20 EURO STOXX 50: UP 0.8 percent at 3,607.64 New York - Dow: UP 0.2 percent at 26,810.74 Tokyo - Nikkei 225: UP 0.3 percent at 22,548.90 (close) Hong Kong - Hang Seng: UP 0.1 percent at 26,740.24 (close) Shanghai - Composite: UP 0.1 percent at 2,939.62 (close)Brent North Sea crude: DOWN 1.7 percent at $58.43 per barrelWest Texas Intermediate: DOWN 1.7 percent at $52.89