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British Pounds Gaps Higher on Brexit Optimism

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Traders are somewhat optimistic about trade talks between the United States and China. Also headlines out of North Ireland and the United Kingdom are soothing fears of Brexit, which boosted the British pound.

The positive Brexit headlines were good for traders who hold the British pound and the euro.

The British pound, in the GBP/USD exchange rate popped two percent overnight as the Sterling saw its largest percentage gain in seven months thanks to positive Brexit news. The GBP/USD last traded at $1.2431 during the Asian trade session.

On Thursday, Irish Prime Minister Leo Varadkar said that a Brexit deal could be reached by the end of the month. This would allow the United Kingdom to leave the European Union with a deal in pace. He said that he had a positive meeting with UK Prime Minister Boris Johnson.

The Irish back stop issue has been a major source of contention between the United Kingdom and the European Union. This has held up a Brexit deal as the UK is set to leave the EU on October 31.

The GBP/USD Forex market was near a two week high at 0.8831 set on Thursday. This market was last at 0.8858.

The EUR/USD exchange rate was trading near a two week high at 1.1007. It hit a three week high on Thursday at 1.1034.

The dollar index, which measures the greenback in a basket of currencies against six other Forex units, was last trading at 98.709. This is at a low price point not seen since September.

Forex Traders Support the British Pound but also watch Trade War Headlines

High level trade meetings between the United States and China wrapped up their first day of talks on Thursday. This was the first time these two sides have met in over two months.

The negotiators expressed optimism that they could reach a way to ease some trade tensions that would delay the White House in raising tariffs at the end of the day on Sunday.

 President Donald Trump told reporters that the U.S. trade team had a “very, very good negotiation with China.” Trump said that he plans to meet with China’s Vice Premier Liu at the White House later today.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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