Sterling stalls ahead of vote to delay Brexit; dollar ticks up
* GRAPHIC: World FX rates in 2019: http://tmsnrt.rs/2egbfVh
(Recasts; updates prices)
By Kate Duguid
NEW YORK, March 14 (Reuters) - The U.S. dollar gained on
Thursday for the first time in a week, albeit modestly, as the
pound stalled at lower levels ahead of a vote to extend
Britain's March 29 deadline for exiting the European Union.
The pound was down 0.54 percent at $1.3266 in afternoon
American trade as Prime Minister Theresa May piled
pressure on rebel lawmakers on Thursday to back her battered
European Union divorce deal as parliament prepared to vote on
seeking a delay to Britain's departure that could ultimately
derail the process.
A day earlier, the British currency soared nearly 2 percent
and reached nine-month highs after lawmakers voted against a
potentially disorderly "no-deal" departure from the EU.
Analysts cautioned against putting large positions on
sterling due to lingering uncertainty about Brexit.
"With the uncertainty around (Brexit), it's not a time ...
to take sizeable positions. The risk/reward still favors waiting
for some clarity," said Charles Tomes, senior investment analyst
at Manulife Asset Management.
The dollar index, a gauge of its strength against six other
major currencies, was up 0.22 percent at 96.757. It had
fallen overnight, at one point brushing a nine-day trough of
The number of Americans filing for unemployment benefits
increased more than expected last week, suggesting the labor
market was slowing, but probably not to the extent implied by a
near-stall in job growth in February.
Other U.S. data showed import prices in February rose by the
most in nine months. Still, the inflation trend remained weak as
import prices dropped on a year-on-year basis for a third
straight month. The data remained supportive of the Federal
Reserve's pledge to be "patient" before raising interest rates.
"In the foreign exchange market overall there's not a lot of
conviction" at the moment, said Tomes. "Volatility is low and
people don't want to put on sizeable positions either way."
The Australian dollar fell to its lowest in three
days after reports that China and the United States had delayed
a meeting to end their trade war. The meeting between President
Donald Trump and President Xi Jinping will not occur this month
and is more likely to happen in April at the earliest, Bloomberg
reported. It was last at $0.7061, down 0.54 percent
on the day.
Investors are worried that any escalation in the trade
conflict will pummel export-oriented economies like Australia,
whose biggest trading partner is China. The yuan was relatively
stable in the offshore market, down 0.31 percent at 6.7230
(Reporting by Kate Duguid and Tom Finn
Editing by James Dalgleish)
First Published: 2019-03-14 02:42:47
Updated 2019-03-14 19:39:00
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