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Forex News: Pound Weakens On Concerns Over Post-Brexit Deal

Pound Weakens On Concerns Over Post-Brexit Deal

12/18/2020 - 05:47:00 (RTTNews)

(RTTNews) - The pound declined against its key counterparts in the European session on Friday, as the U.K. and the European Union expressed pessimism over talks to strike a post-Brexit trade deal.

Worries reemerged after a spokesman for British Prime Minister Boris Johnson said that the most likely outcome would be no agreement unless the bloc changed its position "substantially".

After speaking with the EU Commission President Ursula von der Leyen on Thursday, Johnson said that talks were in a "serious situation" and the EU position on fisheries was not reasonable.

The EU Chief cautioned that bridging the divide, particularly on fishing, would be "very challenging".

The leaders of the European Parliament have set Sunday as a deadline for a deal to be struck by the EU and UK negotiators.

Data from the Office for National Statistics showed that UK retail sales declined less-than-expected in November despite restrictions imposed to contain the second wave of the Covid-19.

The retail sales volume dropped 3.8 percent month-on-month in November, in contrast to the 1.3 percent rise logged a month ago. This was the first decline in seven months and was smaller than the economists' forecast of -4.2 percent.

The pound lost 0.6 percent against the euro, touching a 3-day low of 0.9082. At Thursday's close, the pair was valued at 0.9029. The pound is likely to face support around the 0.92 region, if it falls again.

Data from Destatis showed that German producer prices continued to decline in November, albeit at a softer pace.

The producer price index fell 0.5 percent year-on-year in November, slower than the 0.7 percent decrease in October. Prices decreased for the tenth month in a row.

The pound depreciated to a 2-day low of 1.3489 against the greenback, versus yesterday's trading close of 1.3582. The pound is seen finding support around the 1.31 level.

The pound edged down to 1.1939 against the franc, down by 0.6 percent from Thursday's closing value of 1.2006. On the downside, 1.18 is likely seen as its next support level.

After a brief uptick, the pound weakened to 139.69 versus the yen. At Thursday's close, the pair was valued at 140.00. Should the pound slides further, 135.00 is likely seen as its next support level.

The Bank of Japan retained the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank.

The Policy Board decided to extend the duration of emergency loan facility by six months to September 2021.

Looking ahead, Canada retail sales for October and new housing price index for November are set for release in the New York session.

For comments and feedback: contact editorial@rttnews.com

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