Pound hit multi-week highs as Dollar drops in Asia

The Sterling extended gains against the US Dollar, after drawing support overnight when an initiative by European Central Bank President Donald Tusk on Brexit negotiations was taken as mildly positive. European Commission President Jean-Claude Juncker said before an informal summit in Sweden, “we will be able to come to an agreement as far as the divorce is concerned in the December council, but work still has to be done”.

Last week on Friday, the Dollar weakened against its peers after reports showed that US President Donald Trump’s campaign was last month served with a subpoena. Special Counsel Robert Mueller’s team issued the subpoena for documents containing specified Russian keywords from more than a dozen officials. San Francisco Fed Williams reiterated his view yesterday that the US economy is growing strongly enough for the Fed to continue raising rates gradually over the next couple of years to around 2.5%. Meanwhile, Cleveland Fed Mester said that she feels inflation is poised to pick up, clearing the way for the Fed to continue its gradual process of raising interest rates.

Last Thursday, the Canadian Dollar edged higher against its US counterpart as data showed a surprise rise in domestic manufacturing sales in September to 0.5%, beating economists’ expectation for a 0.3% decline. Separate domestic data showed that international investors bought C$16.81 billion in Canadian securities after acquiring a downwardly revised C$9.77 billion in August 2017. The increase was driven by C$18.73 billion in purchases concentrated in Federal Bonds with short-term maturities.