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GBP near 3Month High as USD Struggles; Brexit Talks Weigh

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Sterling held near threemonth high on Thursday as broadening U.S. dollar weakness offset some of the uncertainty over the outcome of Brexit talks.

Traders are looking for progress on a trade deal between Britain and the European Union. A succesful deal is priced in, but fears persist that the discussions could break down.

The head of the EUs executive Commission on Wednesday reported genuine progress but said the risk of Britain leaving the EU without a deal on Dec. 31 remained.

Sterling, in common with British stocks, has largely shrugged off finance minister Rishi Sunaks unprecedented spending plans announced on Wednesday, as Britain looks to borrow some 400 billion pounds to pay for the novel coronaviruss hit to the economy.

Sunak said on Thursday he was confident a trade deal could be struck.

With just five weeks left until the United Kingdom exits the EU, both sides are trying to reach a trade deal that would avoid a tumultuous finale to the Brexit crisis.

Brexit uncertainty is a big driver behind the pound at the moment. Resolution on that would have a much bigger impact for better or worse than events like the Chancellors speech yesterday, said Mimi Rushton, cohead of global FX sales at Barclays.

There is a broader theme around dollar softness at the moment, the monthend signal is for dollarselling and some of that has been brought forward by Thanksgiving in the U.S., she said.

The pound was down 0.14 at 1.3364 in early London trading after hitting an…

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