LONDON: Sterling climbed on Monday, breaking a two-week losing streak as traders capitalised on the dollar’s broad weakness to adjust their positions.
Investors sold the dollar ahead of a vote in U.S. Congress this week on a tax overhaul, which some traders argue will not have a major positive impact on U.S. economic growth.
That dollar weakness helped the pound, along with results from a survey that showed British factories matched a three-decade high for orders this month.
“It’s mostly dollar weakness but also the industrial order expectations [in the UK] were fairly good,” said David Madden, an analyst at CMC Markets.
Sterling rose 0.63 percent against the dollar to $1.3416 on Monday, snapping a two-week falling streak that has seen it lose nearly 2 percent so far this month.
Madden said that sterling was still trending higher despite losses this month, but future price changes would depend on Brexit-related developments following Britain and the European Union on Friday agreeing to move to the next stage of negotiations.
Against the euro, sterling was flat at 88.17 pence per euro .
Major currency pairs are trading within broad ranges for the last few remaining trading days of 2017.
Latest positioning data showed hedge funds have slowly increased their purchased positions on sterling for the fourth consecutive week with net long bets at a two-month high.
The EU agreed on Friday to move Brexit talks on to trade and a transition pact but some leaders cautioned that the final year of divorce negotiations before Britain’s exit could be fraught with peril.
“The euphoria about the fact that the Brexit negotiations have now moved on to Phase 2 did not last long with sterling almost under as much pressure as Prime Minister Theresa May is who is struggling to accommodate everyone,” Commerzbank strategists wrote in a daily note.
Source: Brecorder.com
