Dollar weak as Brexit deal boosts euro; sterling in check
* Dollar weaker against most majors
* Sterling lower before parliament votes on Brexit deal
(New throughout, updates rates and adds comments post-U.S.
market open; new byline, changes dateline from London)
By Saqib Iqbal Ahmed
NEW YORK, Oct 18 (Reuters) - The dollar crept lower against
the euro on Friday as the common currency enjoyed a lift from
hopes that a Brexit deal between Britain and the European Union
could improve the odds of the euro zone avoiding a recession for
In one of the most striking flourishes of the three-year
Brexit drama, British Prime Minister Boris Johnson confounded
his opponents on Thursday by clinching a new deal with the EU,
even though the bloc had promised it would never reopen a treaty
it agreed last year.
The euro has been rattled this year by dismal manufacturing
data and by worries that deepening economic tensions between the
United States and China could slow euro zone economies even
But with Britain's Johnson and EU leaders agreeing a new
deal for Britain to exit the bloc, and no recent bad news on
the U.S.-China trade front, the euro was getting a boost.
"While the results of tomorrow's vote is far from certain,
we see the progress made over the past week as diminishing the
chances of a no-deal Brexit," said John Doyle, vice president
for dealing and trading at Tempus Inc in Washington.
"A no-deal Brexit would be devastating for the U.K. economy,
but the ripple effects into the mainland would be substantial,"
Doyle said. "That has helped lift equity markets, regional
currencies and put downward pressure on the greenback."
The euro was up 0.19% at $1.1143, near the seven-week high
hit on Thursday.
The Brexit deal comes as U.S. economic data have grown
increasingly gloomy, a development that could see the U.S.
Federal Reserve cut interest rates later this month, its third
rate cut this year.
The dollar index, which compares the dollar against
six major currencies, was down 0.14%. For the week, the index
was down 0.8%, its worst weekly performance in 17 weeks.
Money markets are pricing in an 82% chance of a rate cut at
the Oct. 30 meeting, Refinitiv data show.
The pound was 0.13% lower against the dollar on Friday, amid
doubts the proposed Brexit deal will get through the British
parliament in Saturday's vote.
The yuan held steady against the dollar after data showed
China's economy grew at the slowest pace in more than 27 years
in the third quarter, owing to the trade war with the United
States and weak factory production.
(Reporting by Saqib Iqbal Ahmed, editing by Larry King)
First Published: 2019-10-18 02:27:21
Updated 2019-10-18 16:06:03
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