GBP/USD Retreats From 1-Week Highs as Brexit Talks Stall

GBP/USD Retreats From 1-Week Highs as Brexit Talks Stall
Forex
Thursday, October 12, 2017 - 14:00

Investing.com - The pound pulled away from a one-week high against the U.S. dollar on Thursday, following reports Brexit negociations between the U.K. and the European Union had stalled, further challenging British Prime Minister Theresa May's capacity to conclude a deal.

GBP/USD was down 0.57% at 1.3145 by 10:00 a.m. ET (14:00 GMT), off a one-week high of 1.3266 reached earlier in the day.

Sterling was hit after EU chief negotiator Michel Barnier announced on Thursday that Brexit talks were at an "impasse."

Barnier added that the U.K. had told the EU that it wasn't ready to specify how much the nation should pay in exit fees.

British PM Theresa May had told parliament on Monday that there would be a two-year transition period following Britain's exit from the European Union.

May also said that preparations were underway in the case Britain and the EU were unable to reach a deal on their future trade relationship.

Meanwhile, the greenback was boosted after the U.S. Department of Labor reported on Thursday that initial jobless claims fell more than expected to 243,000 last week.

A separate report showed that producer prices increased 0.4% in September, in line with expectations. Core producer prices, which exclude food and energy also rose 0.4%, beating expectations for a 0.2% uptick.

The data came a day after the minutes of the Federal Reserve's September policy meeting showed that policymakers remain divided on inflation.

Several policymakers believe additional tightening will depend on upcoming inflation data. However, most Fed members said they feel another rate increase this year "was likely to be warranted," the report showed.

Market participants were now looking ahead to the highly-anticipated U.S. consumer price inflation data set to be released on Friday.

Sterling was also lower against the euro, with EUR/GBP up 0.37% at 0.9004.

© Reuters.
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