Sterling headed for worst week in a month as Brexit drags on

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LONDON (Reuters) – The British pound was headed for its greatest weekly drop in a month on Friday, dragged down by rising concern about stagnant Brexit talks.

FILE PHOTO: Wads of British Pound Sterling banknotes are stacked in piles on the Cash Service Austria firm’s headquarters in Vienna, Austria, November 16, 2017. REUTERS/Leonhard Foeger

A broad greenback rebound this month — it has gained in opposition to all its main rivals — has additionally undercut the attraction of the pound earlier than a Financial institution of England coverage assembly subsequent week the place policymakers are anticipated to go away rates of interest unchanged.

Sterling – caught round $1.29 – has struggled this week as lawmakers returned from an Easter recess with little signal of progress in Prime Minister Theresa Might’s efforts to persuade lawmakers to again her Brexit deal.

Graphic: Commerce-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv

Britain’s departure date from the European Union has been pushed again till as late as the top of October. The protracted divorce is hurting the British economic system and poor productiveness is hindering development, Goldman Sachs mentioned.

Sterling edged 0.three p.c larger to $1.2932, its weakest since mid-February. Towards the euro, the pound traded flat at 86.three pence. On a weekly foundation, it’s set to say no 0.6 p.c, its greatest drop in 4 weeks.

Graphic: World FX charges in 2019 tmsnrt.rs/2egbfVh

The greenback, which rose in the direction of a two-year excessive on an index of main currencies, additionally weighed on the pound. So did the prospect of a recent push for Scottish independence.

“Renewed debate concerning the selection of forex for an unbiased Scotland will rekindle uncertainty. Sterling dangers $1.2800 within the present robust greenback atmosphere,” mentioned Chris Turner, head of overseas change technique at ING.

Variations over Brexit have strained relations with the British authorities, and Scotland will begin getting ready for an independence referendum earlier than Might 2021, First Minister Nicola Sturgeon mentioned on Wednesday.

Scots rejected independence in a 2014 referendum and assist since then has caught at round 45 p.c, opinion polls say.

Sterling positions: tmsnrt.rs/2XJwUXX

Reporting by Tom Finn; Extra reporting by Saikat Chatterjee; modifying by Larry King

Our Requirements:The Thomson Reuters Belief Ideas.

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