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Pound Inches Up on Latest Brexit Developments; U.S. Dollar Near Flat

Investing.com - The British pound inched up on Tuesday in Asia as traders digested the latest Brexit developments.

The GBP/USD pair inched up 0.1% to 1.2858 by 12:12 AM ET (04:12 GMT). The pound surged earlier in the day as Brexit Party head Nigel Farage said his party won't contest any seats currently held by the Conservative Party at the general election on Dec. 12.

The move increases the chances of the Conservative Party gaining a majority at the polls, and consequently implementing the EU withdrawal agreement secured last month by Prime Minister Boris Johnson.

"We now have a Leave alliance, albeit we've done it unilaterally,” Farage told a party meeting. “This prevents a second referendum from happening and that to me today is the single most important thing in our country."

On the data front, data showed the UK economy had narrowly missed a recession in the third quarter of 2019, expanding 0.3%.

The EUR/USD pair was little changed at 1.1034. Citing a person familiar with the decision, Politico reported on Monday that U.S. President Donald Trump is expected to push back a decision on whether to impose tariffs on European Union automobile imports for another six months.

The Trump administration has until Wednesday to decide whether to slap import tariffs on cars and auto parts.

Meanwhile, the U.S. dollar index gained 0.1% to 98.070 as investors remained cautious after U.S. President Donald Trump denied he would roll back tariffs on Chinese goods.

Hopes of a trade deal diminished after Trump said reports that the two countries agreed to end tariffs on each other’s goods as part of a trade deal were “incorrect.”

The U.S. financial markets were partially closed on Monday for Veterans Day.

In Hong Kong, violence showed signs of escalation this week as one protester was shot by police while another man was set on fire after being doused with what police described as “flammable liquid.”

Several sub-way lines and other public transportation services were disrupted. Hong Kong Chief Executive Carrie Lam on Tuesday condemned the disruption to commuters and said it is “wishing thinking” to believe the government will yield to protesters’ demands.

The AUD/USD pair and the NZD/USD pair traded 0.1% and 0.3% lower respectively.

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