Forex – Pound Edges Up as Brexit Saga Continues; U.S. Dollar Flat

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Forex - Pound Edges Up as Brexit Saga Continues; U.S. Dollar Flat

Investing.com – The British pound edged up on Wednesday in Asia despite headlines that a no-confidence vote is to be called on U.K. Prime Minister Theresa May’s leadership of the Conservative party.

The news came after May called off Tuesday’s vote on her Brexit deal so she could go back to Brussels and ask for changes to it. Reports on Tuesday said one of May’s spokespeople noted that the House vote on May’s Brexit deal could be postponed for up to six weeks.

Questions about May’s future arrived as she made little progress convincing lawmakers in Brussels to amend the terms of her Brexit deal, increasing the prospect of another referendum, or an extension of Article 50, which was triggered in March last year, setting into motion Britain’s departure from the European Union.

“As a result, we think the UK’s position in the EU after March 2019 might still be any one of a Brexit deal, no deal or no Brexit,” BNP Paribas (PA:BNPP) said.” “But an extension of Article 50 and a possible referendum now look more likely than before.”

The GBP/USD pair last traded at 1.2508 by 1:20 AM ET (06:20 GMT), up 0.14%.

Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies inched up 0.02% to 97.382 on Wednesday in Asia, after rising overnight to 97.545, its highest since Nov. 13.

The greenback was lifted as long-term U.S. Treasury yields bounced from three-month lows.

“In addition to higher Treasury yields, the weakening pound is providing a key boost to the dollar,” said Yukio Ishizuki, senior forex strategist at Daiwa Securities in Tokyo.

“With Brexit talks seemingly headed toward a dead end, this has been a golden opportunity for speculative market players to short the pound.”

Elsewhere, the USD/CNY pair fell 0.2% to 6.8874 as the People’s Bank of China (PBOC) set the yuan reference rate at 6.9064 vs the previous day’s fix of 6.8996.

The USD/JPY pair rose 0.1% to 113.46, while the AUD/USD pair also gained 0.1% to 0.7214.

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