(Bloomberg) -- The pound held close to a more than two-week high as U.K. Prime Minister Theresa May targets a deal within days that will salvage her Brexit agreement.
Sterling jumped the most in two months Tuesday before touching the highest since Feb. 4 during Asia hours Wednesday. The currency has been supported by optimism that a meeting between May and European Commission President Jean-Claude Juncker in Brussels this evening may yield progress on the impasse in the Brexit talks.
Still, the currency pared Tuesday’s gains Wednesday as European Union officials played down the prospects of a breakthrough. Also, speculation grew that some members of May’s Conservative Party could quit to join a new independent grouping of lawmakers, according to a trader. Three Conservatives are said to be poised to defect as early as Wednesday, which would reduce the prime minister’s working majority in Parliament.
“The pound has been on the backfoot since Juncker downplayed expectations regarding today’s meeting,” said Manuel Oliveri, a strategist at Credit Agricole SA. “We have to wait for what happens later today.”
Sterling fell 0.2 percent to $1.3032 as of 9:51 a.m. London time after earlier rising as high as $1.3076. The currency also weakened 0.3 percent to 87.08 pence per euro after gaining 0.8 percent Tuesday.
May is scheduled to meet Juncker at 5:30 p.m. U.K. time.
--With assistance from Vassilis Karamanis.
To contact the reporter on this story: Charlotte Ryan in London at cryan147@bloomberg.net
To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net, Scott Hamilton, Anil Varma
©2019 Bloomberg L.P.
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