Forex - Dollar Rides Sterling Slump Higher as May Cans Brexit Deal Vote
Published Dec 10, 2018 01:50PM ET
Investing.com - The dollar rose against its rivals Tuesday, helped by a plunge in the pound to 21-month lows after UK Prime Minister Theresa May called off a vote on a Brexit deal expected Tuesday, raising further uncertainty about the country's exit from the European Union.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.70% to 97.15.
May called off a parliamentary vote for the Brexit deal, deferring it until a later date, fearing that the deal would have not gained the required votes to pass through parliament amid disagreements among UK lawmakers concerning the Irish border, or backstop, issue.
May attempted to convince parliament that she would seek additional legal assurances from the EU that the backstop will only be temporary during her negotiations in Brussels over the next few days. But EU lawmakers have shown little willingness to ease their stance, reaffirming the Brexit deal was not up for renegotiation.
"We will not renegotiate the deal, including the backstop, but we are ready to discuss how to facilitate UK ratification. As time is running out, we will also discuss our preparedness for a no-deal scenario," EU Commissioner Donald Tusk said.
GBP/USD fell 1.59% to $1.2549, while EUR/USD fell 0.22% to $1.1354.
The dollar rose to session highs against safe-haven yen, meanwhile, on improved risk sentiment.
USD/JPY rose 0.43% to Y113.19
The dollar has been under pressure in recent trading sessions on expectations the Federal Reserve may adopt a less aggressive stance on monetary policy tightening next year amid trade uncertainty and slowing global growth.
"A decision to pause (on rate hikes) in March would also be consistent with the likelihood that tariff-related uncertainty will look particularly high around the end of the 90-day grace period on March 1," Goldman Sachs said in a note to clients.
USD/CAD, meanwhile, rose 0.94% to C$1.3392 as the loonie came under pressure from falling oil prices.
-- Reuters contributed to this report.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.