UK pound is mixed today as Forex traders process the latest news out of the United States, with rumors about an agreement in the government shutdown and debt ceiling debates fading fast. But there is another side focus with the pound today. A deal between London and Beijing is about to make the United Kingdom the yuan’s currency hub in Europe.
UK pound is higher against the euro and the yen today, but it is struggling against the US dollar as Forex traders look for direction on rumors related to the government shutdown and the debt ceiling battle. Earlier, there were hopes that an agreement had been reached, but now those hopes seem to be fading.
What is really giving the pound an edge over the euro right now, though, is a trade agreement between the United Kingdom and China. The two countries have agreed to a direct pound-yuan trade. This makes London the de facto currency center for the yuan (also called the renminbi) in Europe. While there isn’t much in terms of fundamentals to support the pound right now, this news could provide a little boost for the sterling — at least against some currencies.
At 15:16 GMT GBP/USD is down to 1.5973 from the open at 1.5983. EUR/GBP is down to 0.8453 from the open at 0.8485. GBP/JPY is up to 157.5890 from the open at 157.5850.
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