The British Pound Hesitates Before A Vote on Brexit

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    The British pound hit a seven-week high against the dollar on Monday before erasing some of its gains as the British prime minister warned members on the eve of a crucial day for Brexit.

    Around 8:00 pm GMT, the pound rose a little bit against the euro, 89.10 pence versus 89.31 Friday night, and advanced against the dollar, 1.2870 for a pound compared with 1.2844 dollar on Friday. The euro, for its part, stabilized against the greenback to 1.1467 versus 1.1469 dollar seen on Friday.

    Theresa May in front of the Parliament warned MEPs against the unpredictable consequences of a Tuesday rejection of the Brexit agreement she has concluded with the EU. Ms May said Brexit’s planned date of March 29 should not be postponed.

    “This speech did not really have an impact on the markets,” observed Erik Nelson of Wells Fargo.

    The pound was boosted a little earlier in the session after Downing Street issued a letter signed by European Council President Donald Tusk and European Commission President Jean-Claude Juncker, to provide new support on one of the most controversial provisions of the agreement: the Irish backstop.

    The British pound reached 1.2879, a high in seven weeks against the dollar before erasing part of its gains. Faced with the euro, the pound rose at 88.75, a high since early December.

    The euro lost some ground against the dollar after the publication of the figures on industrial production in the euro area, which fell by 1.7% in November compared to October.

    On the indicators front, the markets also followed the Chinese trade surplus, which, for the second year in a row, fell in 2018, threatening the global economic growth, while at the same time the imbalance widened with the United States.

    In this context the dollar ended up rising against the Chinese currency, to 6.7681 yuan against 6.7630 yuan on Friday.

    On Monday, the greenback retreated against the Japanese currency, 108.24 yen.

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    I cover technology, utilities and biotechnology for Markets Morning, and I help out occasionally with other industry sectors. I've written about investment and personal finance topics for more than 20 years from a lowly copywriter to editor-in-chief, so I've done a little bit of everything. For what it's worth, I have a BA from Duke University and an MBA from Rollins College. I'm married with one daughter, and that's worth more than everything else put together.

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