The pound sterling gained ground against its US rival during London trade on Monday after it was agreed by both parties that discussions would be extended beyond the looming deadline. Both negotiators want to continue the talks in an effort to resolve the existing deadlock on two key issues, namely fishing and corporate regulations. Markets are showing clear signs of relief that the prime minister does not seem to want to abandon all hope yet, and is willing to stay at the table. Nonetheless, currency strategists say that without any tangible clarity in the coming days, any gains for the pound are likely to be limited.
In London trading as of 10:48 am, the GBP/USD was trading higher at $1.3417, a gain of 1.409% and moving away from the session peak of $1.34377. The GBP/JPY was higher at 139.149 yen, up 1.1205%; the pair has ranged from a trough of 137.457 yen to a high of 139.460 yen. The EUR/GBP was trading at 0.9054 pence, down 1.0904% and off the session low of 0.90552 pence.
A Look to UK Labor Data
With a very quiet day ahead for the economic calendar, markets will focus on tomorrow's release of labor statistics from the UK. In a recent poll, analysts are predicting that the ILO unemployment rate for the three-month period through October will rise to 5.1% from the current 4.8%. The November claimant count change is also forecast to show 50,000 new unemployed, well above the previous reading. On a positive note, average earnings for the three-month period through to October is expected to show an increase in earnings with and without bonuses; analysts predict a respective rise to 2.3% and 2.6% from 1.3% and 1.9%.