The pound recovered yesterday against the dollar and euro as Prime Minister Boris Johnson looked set to secure his wish for a general election before Christmas that might break the Brexit deadlock.

Traders also looked forward to a meeting of the Federal Reserve that was expected to end with the US central bank announcing an interest-rate cut on Wednesday.

In afternoon trading, sterling clawed back losses to trade at $1.2878. The euro, meanwhile, reversed direction, falling to 86.17 pence.

Britain appeared headed for a December election after the main opposition Labour party said it would support Mr Johnson’s call for a pre-Christmas poll.

David Cheetham, chief market analyst at XTB trading group, said “the pound will likely stay fairly well supported unless a no-deal outcome becomes more than marginally possible once more”.

In equities trade, London’s benchmark FTSE 100 index was down 0.7 per cent in afternoon deals, extending earlier losses as the stronger pound weighed on share prices for multinationals that have substantial earnings in dollars.

In the eurozone, Frankfurt’s DAX 30 lost 0.1 per cent while the Paris CAC 40 was 0.1 per cent higher. 

Meanwhile, oil prices extended Monday’s big losses, sparked by reports of another pick-up in United States stockpiles that indicated weak demand growth. (AFP) 

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