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Sterling Higher as Brexit Hopes Grow

Pound rises as some optimism regarding Brexit still remains; UK labor data helps to improve market sentiment.

The pound sterling steadied during Tuesday’s London trade after a sharp rebound on Monday as Forex traders’ collective hopes are growing that a Brexit agreement will be signed. Negotiators on both sides have agreed to try to reach a compromise on the sticking points; the EU negotiator pointedly said that he believes it is still possible to reach a deal. That gave market players some relief, though implied volatility measures suggest there are likely to be more price swings in the days ahead and at least until the end-of-year deadline draws near.

In London trading as of 11:35 am, the GBP/USD was trading higher at $1.3348, a gain of 0.129% and off the session high of $1.33626 while the low was recorded at $1.32795. The EUR/GBP was lower at 0.9099 pence, a loss of 0.1032%; the pair has ranged from a trough of 0.90977 pence to a high of 0.91496 pence in today’s session. The GBP/JPY was higher at 138.834 yen, up 0.1147%.

UK Labor Data Shows Mixed Outcome

Also helping to improve sentiment was the mixed outcome of UK labor data released earlier today. Though the claimant count for the month of November was worse than expected at 64,3000 against a forecast of 50,000, the ILO unemployment rate was less at 4.9%, higher than the previous month which was 4.8% but better than the forecast of 5.2%. More importantly, average earnings, both with bonus and without, was better than analysts had forecast at 2.7% and 2.8%, respectively, against a forecast of 2.2% and 2..6%.

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