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* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv
By Lawrence White
LONDON, Nov 26 (Reuters) - Sterling held near three-month
high on Thursday as broadening U.S. dollar weakness offset some
of the uncertainty over the outcome of Brexit talks.
Traders are looking for progress on a trade deal between
Britain and the European Union. A succesful deal is priced in,
but fears persist that the discussions could break down.
The head of the EU's executive Commission on Wednesday
reported "genuine progress" but said the risk of Britain leaving
the EU without a deal on Dec. 31 remained.
Sterling, in common with British stocks, has largely
shrugged off finance minister Rishi Sunak's unprecedented
spending plans announced on Wednesday, as Britain looks to
borrow some 400 billion pounds ($534.68 billion) to pay for the
novel coronavirus's hit to the economy.
Sunak said on Thursday he was confident a trade deal could
be struck.
With just five weeks left until the United Kingdom exits the
EU, both sides are trying to reach a trade deal that would avoid
a tumultuous finale to the Brexit crisis.
"Brexit uncertainty is a big driver behind the pound at the
moment. Resolution on that would have a much bigger impact for
better or worse than events like the Chancellor’s speech
yesterday," said Mimi Rushton, co-head of global FX sales at
Barclays.
"There is a broader theme around dollar softness at the
moment, the month-end signal is for dollar-selling and some of
that has been brought forward by Thanksgiving in the U.S.," she
said.
The pound was down 0.14% at $1.3364 in early London
trading after hitting an early September high of $1.3399 in
Asian trading. It slid slightly against the euro to 89.1 pence
.
With a lack of major scheduled news on Thursday, sterling
traders will be watching for any official or unofficial news on
the Brexit talks, traders said, with negative signals likely
driving bigger price swings because a positive outcome is
expected.
($1 = 0.7481 pounds)
(Reporting By Lawrence White; Editing by Saikat Chatterjee and
Barbara Lewis)
