The draft divorce deal with the European Union struck on Tuesday would allow the United Kingdom to leave the EU with a deal that avoids a chaotic “hard Brexit” departure. But EU chief negotiator Michel Barnier cautioned that the road to ensuring a smooth UK exit was still long and potentially difficult.
The dollar index, a gauge of the currency’s performance against six major peers, ticked up slightly to 96.87, but remained off a 16-month high hit on Monday.
Sterling gained 0.06 percent versus the dollar, changing hands at $1.3002.
The euro firmed 0.15 percent to trade at $1.1328.
Against the Japanese yen, the dollar lost 0.13 percent to trade at 113.47. The yen had gained in the previous two sessions versus the dollar. But investors think the dollar still remains the more favoured flight-to-safety currency over the yen and Swiss franc.
· “Getting the draft approved by the parliament will be extremely challenging and that’s why we are seeing sterling gains capped at 1.3,” said Ray Attrill, head of currency strategy at National Australia Bank.
He said the dollar’s fundamentals remain strong, backed by a robust U.S. economy and rising wage pressures which will keep the Federal Reserve on track for further rate rises.
“A rate hike in December is fully priced in and the next lift-off in rates will most likely be in March next year, which is likely to support the dollar,” said Attrill.
· China’s new home prices picked up slightly in October, led by sustained gains in smaller cities and suggesting a key driver of economic growth remained resilient, although investor caution points to moderation heading into 2019.
Average new home prices in China’s 70 major cities rose 1.0 percent in October from a month earlier, a touch higher than the previous month’s reading of 0.9 percent, according to Reuters calculations based on an official survey on Thursday.
The prices gains were mostly driven by China’s 35 smaller cities, which posted an average price increase of 1.1 percent in October, accelerating from 0.9 percent in the previous month, the National Bureau of Statistics (NBS) said in a statement accompanying the data.
· U.S. state spending topped $2 trillion for the first time in fiscal 2018, with Medicaid expenditures rising the most along with a significant increase in transportation spending, according to a report released on Thursday.
Total expenditures grew an estimated 4.8 percent compared to 3.8 percent in fiscal 2017, the National Association of State Budget Officers’ (NASBO) annual state expenditure report said.
· U.S. Vice President Mike Pence said on Thursday President Donald Trump plans to meet North Korean leader Kim Jong Un in the new year but won’t repeat past mistakes of allowing promises to be broken on pledges to end arms programs.
· China has delivered a written response to U.S. demands for wide-ranging trade reforms, three U.S. government sources said on Wednesday, a move that could trigger negotiations to bring an end to a withering trade war between the world’s top economies.
Trump is expected to meet Chinese President Xi Jinping on the sidelines of a G20 summit in Argentina at the end of November and in early December.
· Oil prices stabilized on Thursday, reversing earlier declines, but market sentiment remained cautious over concerns that a supply glut may emerge amid a glum economic outlook.
Front-month Brent crude oil futures were trading at $66.17 per barrel at 0737 GMT, up 5 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $56.29 a barrel, up 4 cents from their last settlement.
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