The British pound was modestly higher against the dollar Monday, as formal talks between the U.K. and the European Union to renegotiate trade terms get under way.
Overall, the dollar was little changed, with the widely watched ICE U.S. Dollar Index
which tracks the buck against a basket of six rivals, down less than 0.1% at 97.07.
The WSJ Dollar Index
a measure of the greenback against 16 major currencies, was up less than 0.1% at 88.43.
Brexit talks begin: Sterling
bought $1.2801, up from $1.2778 late Friday in New York. The move came as David Davis, the U.K.’s Brexit Secretary, and his team kicked off negotiations with the EU’s chief negotiator Michael Barnier and his colleagues in Brussels to discuss Britain’s exit from the European Union, known as Brexit, after Britons voted a year ago to abandon EU membership.
Britain will leave the EU’s single market and customs union, but an agreement for a smooth transition would be ideal, U.K. Treasury Chief Philip Hammond said on BBC1’s “The Andrew Marr Show” show on Sunday.
However, no Brexit deal for the U.K. would be a “very, very bad outcome,” Hammond said. That contrasts with statements previously made by U.K. Prime Minister Theresa May, who has said no deal would be better than a bad deal for the U.K.
“Although the prospect of a soft Brexit has the ability to support sterling, I feel the currency remains vulnerable to further downside amid the confusion and ongoing uncertainty that Brexit presents,” said FXTM research analyst Lukman Otunuga in a note.
“From a technical standpoint, the [pound-dollar pair] still remains under pressure on the daily charts. Repeated weakness below the pivotal 1.2775 should encourage bears to target 1.2600,” he said.
The pound held steady in early trade Monday after a van plowed into pedestrians near a North London mosque late Sunday, killing one person and injuring several others. Police are investigating the incident as a potential terror attack. It comes less than three weeks after a deadly terror attack started at London Bridge.
Sunday night’s incident is the latest shock to Britain, where May is under pressure as she tries to put together a government, after a general election that ended in a hung parliament. In addition, she has been roundly criticized over her response to a devastating fire at a tower block in London last week that left dozens presumed dead.
Against the yen
the pound rose to ¥142.15 from ¥141.67. Against the euro
the British currency rose to €1.1424 from €1.1411.
also strengthened against the yen, rising to ¥111.09 from ¥110.88 late Friday. The yen weakened after news that Japan exports posted the biggest jump since 2015.
French vote: The euro
was buying $1.1201, not far off from $1.1198 late Friday.
French President Emmanuel Macron’s La République en Marche party on Sunday won a firm majority in parliamentary elections, strengthening the position of the pro-Europe movement against nationalist forces that crept to the spotlight last year.
The election result means Macron will also now have the mandate to push through economic reforms.