Pound Higher After Report Of Possible Delay To Brexit

The pound was higher against its major counterparts in the European session on Friday, following a media report indicating the possibility of delaying Brexit beyond March 29.

The Evening Standard reported that the U.K. cabinet ministers are of the opinion that Brexit could be delayed beyond the scheduled exit of March 29.

A backlog of at least six essential Bills, including the immigration bill, have to be passed before the U.K.’s departure from the European Union.

Even asking MPs to sit at weekends and cancel their half-term holiday in February may not provide enough time to avoid asking for a delay, the report showed.

Further underpinning the currency was better was expected GDP data for November.

Data from the Office for National Statistics showed that UK economic growth improved for a second straight month in November, led by services and construction growth, and exceeded economists’ expectations.

Gross domestic product grew 0.2 percent from October, when the economy expanded 0.1 percent. Economists had expected the pace of growth to remain unchanged. In September, GDP stagnated.

The currency traded mixed against its major counterparts in the Asian session. While the pound held steady against the yen and the franc, it rose against the greenback. Against the euro, it dropped.

The pound strengthened to a 2-day high of 0.8980 against the euro, from an 8-day low of 0.9062 hit at 4:00 am ET. The pound is seen finding resistance around the 0.88 level.

Having declined to a 2-day low of 1.2710 against the greenback at 4:00 am ET, the pound reversed direction and advanced to a 1-1/2-month high of 1.2850. The next possible resistance for the pound is seen around the 1.30 mark.

The pound firmed to an 11-day high of 1.2615 against the Swiss franc, following a decline to 1.2481 at 4:00 am ET. The pound is poised to challenge resistance around the 1.29 mark.

Bouncing off from an early low of 137.64 against the yen, the pound spiked up to a 3-day high of 139.14. If the pound rises further, 143.00 is possibly seen as its next resistance level.

Data from the Ministry of Finance showed that Japan had a current account surplus of 757.2 billion yen in November. That exceeded expectations for a surplus of 566.3 billion yen and was down from 1,309.9 billion yen in October.

The trade balance reflected a deficit of 559.1 billion yen versus expectations for a shortfall of 612.6 billion yen, following the 321.7 billion yen deficit in the previous month.

Looking ahead, U.S. CPI and monthly budget statement for December are scheduled for release in the New York session.

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

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