[ad_1]
SINGAPORE (Reuters) – The dollar has firmed against the pound sterling and the euro on Monday, as the unsuccessful efforts of the British to reach an agreement on Brexit in the prospect of a summit key to the European Union have strengthened the preference of global investors for safe haven currencies.
FILE PHOTO: Sterling and US dollar banknotes are shown in this June 22, 2017, illustrated photo. REUTERS / Thomas White / Illustration / Photo File
The euro traded around 0.13% at 1.156 on Monday, while the pound lost 0.36% at 1.3106 after peaking in October of 1.3258. Friday.
The dollar index, an indicator of its value against six major peers, rose 0.13% to 95,349.
The border problem between Britain and Ireland thwarted the attempt to reach an agreement on Brexit, as weekend negotiators acknowledged their defeat after the marathon talks and insisted on a break for the next few days.
The pound is also under pressure following statements by former Foreign Minister Boris Johnson on Sunday that Britain must stand up to the tyrants of the European Union and push for a deal on "super-Canada".
Johnson, a key player in the campaign to leave the EU in 2016 and favorite bookmakers to replace Prime Minister Theresa May, is the latest critic to have redoubled efforts to encourage him to rethink his plan to leave the union.
"The Pound Sterling is primarily Brexit-driven and the data is just a distraction," said Kathy Lien, General Manager of BK Asset Management's FX Strategy in New York.
"Time is running out and an agreement is approaching, but after being burned by false hopes, investors are ignoring contradictory headlines and waiting for official confirmation," she said.
The yen is strengthened at 112.07 against the dollar on Monday. Compared to the dollar, the yen strengthened in six of the last seven trading days, as overall risk confidence remained unchanged, helping to maintain safe-bets on the Japanese currency.
US Treasury Secretary Steven Mnuchin said on Saturday that Washington wanted to include a provision to discourage currency manipulation in future trade agreements, including with Japan, based on the currency chapter in the new agreement to reorganize the North American Free Trade Agreement (NAFTA).
His remarks sparked concern in Japan, where the national media made the headlines and wondered whether this would give Washington the right to call currency manipulation any future intervention by Tokyo on the foreign exchange market in order to contain the rise of the yen.
Analysts expect the yen to strengthen in the near term, a potential negative sentiment for equities would catalyze safe haven demand for the yen.
"Our bias is that stocks will remain under pressure this week and we see the possibility for the USD / JPY to move back slightly to the 110 level," said a research note from Mizuho Bank.
On Monday, the Japanese Nikkei was down 1.5% to 22,352 passengers.
The Australian dollar changed hands at 0.7101 against the dollar, down 0.25%. The Australian has reached a two-year low of 0.7039 on October 5th.
The Canadian dollar traded flat against the dollar on Monday at 1.3025.
The Swiss franc, considered a safe haven for traders, hardly changed at 0.9908 against the dollar.
The spot gold price was built on last week's gains, changing hands at $ 1.222 an ounce, gaining 0.38%.
Reportage of Vatsal Srivastava; Edited by Sam Holmes and Richard Borsuk
