Pound's Slump Keeps up Dollar's Hopes of Ending Losing Streak

By Yasin Ebrahim

Investing.com – The U.S. dollar remained tentatively on track to snap a four-day losing streak Wednesday, underpinned by sharp gains against the pound on fears of rocky EU-U.K. trade talks ahead.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.11% to 98.92.

Ahead of U.K. and EU trade talks set for March 2, investors are worried that tough rhetoric from both sides recently suggests negotiations will be anything but smooth.

The EU's chief negotiator, Michel Barnier, said the bloc would not agree a deal "at any price" and rebuffed the idea of offering the U.K. a Canada-style trade agreement.

GBP/USD fell 0.71% to $1.2912 and EUR/USD rose 0.17% to $1.0898.

"We see Brexit uncertainty restricting sterling gains to $1.32 and 85p against the euro by end-2020," Investec said in a note.

The advance in the dollar, however, was also stifled by a fall in Treasury yields on reports the spread of the virus worldwide continues to gather pace, with a rise in infections across Europe, the U.S. and the Middle East.

USD/JPY was flat at Y110.27 as safe havens caught a bid as the selling on Wall Street resumed.

USD/CAD rose 0.29% to C$1.3316 as the loonie gave up further gains after oil prices turned negative despite data showing U.S. weekly crude supplies rose less than expected last week.

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