The pound is again in positive territory, even when the main economic indicators were weaker than expected, as the market preferred to focus on signs of progress in the Brexit negotiations.
The currency strengthened on Monday after the Sunday Times reported that British Prime Minister Theresa May had made concessions from Brussels, which would preserve all of Britain in a customs union with the EU. The pound rose even after the report showed that the service sector slowed in October. Sterling can break through $ 1.35 within two days if a "divorce" is agreed by the UK and the European Union.
According to a Bloomberg forecast, the British currency can recoup about half of its decline by more than 10 percent from Brexit's level if an agreement is reached on a "divorce". The position of traders on the pound was greatly reduced, as the missed deadlines for negotiations over the past months caused concern and increased risks.
Nevertheless, the achievement of any variant of the transaction is likely to be a problematic story. Over the next few weeks, sterling will continue to depend on news headlines, and recent fluctuations in exchange rate mean "instability, which is possible with constant political uncertainty."
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