Thursday, 28 October, 2021

Pound edges higher at start of Brexit-heavy week

LONDON: The pound rose on Monday as investors weighed the risks of another Brexit-themed week, with many willing to bet money on another, perhaps long extension to proceedings.

In stock trading, Frankfurt was under pressure from poor German data, but other European equity markets reversed an earlier negative trend, while Wall Street stumbled at the opening bell, reports AFP.

"The pound is edging higher at the start of what could be a decisive week for the currency with Brexit once more at the front and centre of traders' minds," said David Cheetham, an analyst at XTB.

"With the UK government asking for another extension... the most likely outcome seems to be that this will be granted by the other 27 EU members but the chances of a no-deal are creeping higher," he said.

Prime Minister Theresa May will press ahead Monday with her bid for a Brexit "compromise" with the opposition despite a backlash from her own party, as she attempts to prevent Britain crashing out of the European Union this week.

Talks with the Labour Party are expected ahead of a crucial EU Wednesday summit that could see Britain leave the bloc as early as Friday, if no further delay is agreed.

Having failed three times to get her own withdrawal deal through parliament, May has been locked in talks with Labour to find a modified plan that could command a majority, causing anger within her own party.

German data showing falling imports and exports in February spoiled the Monday mood in the eurozone and added to concerns about the health of the eurozone's biggest economy which is heavily-trade dependent.

German imports fell 1.6 percent month-on-month to 92.3 billion euros ($103.6 billion) while exports dropped 1.3 percent to 110.9 billion, federal statistics authority Destatis said. IG analyst Joshua Mahony called the date "sagging" and said that "with both exports and imports falling for the European powerhouse, a worsening picture becomes apparent for the eurozone flagship economy".