Pound surges amid hopes for Brexit deal

October 15, 2019

The pound rose against its main rivals on Tuesday in the early European session, as investors welcomed comments from EU negotiator Michel Barnier that a Brexit deal could be reached this week. P>

Speaking in Luxembourg, Barnier said a deal with Britain regarding the terms of their divorce is still possible this week. p>

Barnier, however, noted with cautious optimism that more stringent negotiations were still needed. p>

Data from the Office of National Statistics showed that unemployment in the UK increased and employment declined three months before August. p>

The number of working people fell by 56,000 to 32.69 million, while the unemployment rate in the three months to August increased by 22,000 to 1.31 million. p>

The British currency fell against major currencies in the Asian session. p>

The pound rose to a 4-day high of 137.58 against the yen from a low of 136.52, fixed at 20:30 Eastern time. The next immediate pound resistance is expected near the level of 142.5. P>

The final figures from the Ministry of Economy, Trade and Industry showed that industrial production in Japan declined in August, according to an initial estimate. p>

The volume of industrial production in August decreased by 1.2 percent compared to the previous month, and in July, growth was 1.3 percent. This was in line with preliminary estimates. P>

Falling to 1.2598 against the greenback at 5:00 pm ET, the pound reversed direction, reaching a 4-day high of 1.2698. The pound is at a resistance level of about 1.30. P>

The pound strengthened to 1.2666 against the Swiss franc for the first time since June 12. The Brit can test the resistance near the level of 1.30. p>

Data from the Federal Statistical Office showed that producer and import prices in Switzerland in September fell worse than forecasted. p>

Producer and import prices in September fell by 2.0 percent compared to the same period last year. Economists had expected a 1.7 percent drop. P>

The pound rose to 0.8690 against the euro, the highest level since May 15. If the pound continues to rise, it is likely to test resistance near the 0.84 mark. p>

Looking ahead, at the New York session will be presented data on home sales in Canada in September and reviews of the Fed's manufacturing activity in New York in October.

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