Pound Sterling Exchange Rates Jump on Soft Brexit Possibilities

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Bloomberg reported on Friday afternoon that "Spanish and Dutch finance ministers have agreed to work together to push for a Brexit deal that keeps Britain as close to the European Union as possible".

According to reports today, sources are claiming that the Foreign Ministers from each country had independently agreed to work with each other to maintain a deal that would benefit both the United Kingdom and EU.

There is no new agreement between the Netherlands and Spain about how Britain should leave the European Union, a Dutch Finance Ministry official said on Friday.

Their approach is reportedly to focus on "the importance of United Kingdom ties for both countries" whilst also "agreeing to keep track of this common interest but offering full support to Michel Barnier's negotiating efforts".

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Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo, said: "Market reaction to dollar-buying factors has been subdued, while market reactions to dollar-selling, have been more vivid".

The pound is now at around $1.3380 against the U.S. dollar, down 0.24 per cent from this morning's starting levels and the first time the pairing has dropped below $1.35 in two weeks.

The Australian Dollar (AUD) has enjoyed a prosperous week for the most part, riding the swell in commodity prices and supported by recent predictions that the Reserve Bank of Australia (RBA) might move for a rate hike in mid-2018. US Producer Price Index data released this afternoon revealed that inflation may not pick up as suggested and was further compounded when Federal Reserve member Bostic said he can not see the Federal Reserve raising interest rates three times in 2018.

The monthly reading similarly rose, this time from 0.1% to 0.3%, beating the consensus of 0.2%. Sterling has been higher across the board today, climbing by around 1.0% against the New Zealand Dollar, South African Rand, Japanese Yen, US Dollar, Australian Dollar, Hong Kong Dollar, and Canadian Dollar.

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