Analyst on sterling: 'Signs of positivity have been supportive once more'
Continue Reading Below
The U.S. dollar lost ground against most of its major rivals Wednesday, dropping in particular against the British pound as reports signaled progress in the Brexit negotiations.
Where are currencies trading?
The ICE U.S. Dollar Index dropped to 93.095, down from 93.230 late Tuesday in New York. The gauge remains up about 0.2% for the week, though it's still down 9% for the year.
The pound rose to $1.3402, up from $1.3339 late Tuesday, as the currency touched levels last seen in late September and built on its gain from the prior day (http://www.marketwatch.com/story/dollar-rises-as-traders-wait-to-see-if-feds-powell-will-give-hawkish-hints-2017-11-28).
Sterling has been jumping on multiple reports that suggest Britain and the European Union are closing in on a financial settlement in their talks about the country's planned exit from the trade bloc.
Continue Reading Below
Some analysts have speculated that U.K. Prime Minister Theresa May could present a formal offer on the so-called divorce bill and other sticking points at a Dec. 4 dinner with EU officials.
Read more:How conflicting Brexit headlines sent the British pound on a wild ride (http://www.marketwatch.com/story/how-conflicting-brexit-headlines-sent-the-british-pound-on-a-wild-ride-2017-11-28)
The euro edged up to $1.1874, up from $1.1842 late Tuesday in New York.
Against the Japanese yen , the buck was roughly unchanged at Yen111.48.
What are strategists saying?
"Sterling has shot higher after finally there seems to be some signs of potential agreement over the UK/EU negotiations on Brexit," said Richard Perry, a Hantec Markets analyst, in a note.
"The contentious divorce bill looks close to being agreed now, with the U.K. increasing their offer to EUR50bn. Sterling has been very reactive to the prospects of a hard or soft Brexit and signs of positivity have been supportive once more," he added.
"While this stage of the negotiations has little economic significance for sterling, the news of a breakthrough in talks has profound political significance for a currency that is pricing in a lot of bad news," said Viraj Patel, foreign exchange analyst at ING, according to a Wall Street Journal report.
What could help drive the market?
Traders will be tracking progress on a U.S. tax overhaul after the Senate Budget Committee on Tuesday voted 12-11 (http://www.marketwatch.com/story/senate-budget-committee-advances-republican-tax-bill-on-party-lines-2017-11-28) to advance a Republican tax bill. A full Senate vote could be possible as early as Thursday.
A second estimate on U.S. third-quarter gross domestic product is due at 8:30 a.m. Eastern Time, with economists polled by MarketWatch forecasting 3.3% growth.
An October reading on pending home sales is slated to arrive at 10 a.m. Eastern. That's followed at 2 p.m. Eastern by the Federal Reserve's Beige Book, a report that provides anecdotal evidence about U.S. economic conditions.
Departing Fed Chairwoman Janet Yellen is scheduled to testify on the economic outlook before a congressional committee at 10 a.m. Eastern.
Check out:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
Also on the Fed front, New York Fed President William Dudley is due to discuss the economy's prospects at New Jersey's Rutgers University at 8:30 a.m. Eastern. Later, San Francisco Fed President John Williams is slated to speak at 1:50 p.m. Eastern at an annual economic forecast luncheon in Phoenix sponsored by Arizona State University.
(END) Dow Jones Newswires
November 29, 2017 05:24 ET (10:24 GMT)