Pound Slightly Higher on Brexit Deal; U.S. Dollar Falls

Investing.com - The U.S. dollar remained tepid on Thursday, while sterling tried to hold onto earlier gains after reports that the U.K. and European Union had reached a Brexit deal.

European Union Commission President Jean-Claude Juncker and U.K. Prime Minister Boris Johnson announced an agreement via Twitter, which was later expanded on by the EU's top negotiator Michel Barnier.

However, Northern Ireland's Democratic Unionist Party said it remains opposed to the proposed agreement, making it uncertain if the deal will be passed by the U.K. Parliament when it votes on Saturday.

The deal hinges on Northern Ireland applying a limited set of EU rules on some goods, with the U.K. only charging EU tariffs on goods passing through to EU markets. Northern Ireland will also maintain the right to vote every four years on whether the arrangements will stay.

GBP/USD gained 0.2% to 1.2856 as of 10:39 AM ET (14:39 GMT) after hitting an earlier high of 1.2935, while EUR/USD was up 0.5% to 1.1116.

Meanwhile the U.S. dollar was lower, hit by falling manufacturing data due to a strike at General Motors (NYSE:GM) and slowing global growth amid trade tensions.

Manufacturing production fell 0.5% last month after an upwardly revised 0.6% rise in August. Excluding motor vehicles and parts, overall industrial production and manufacturing output still fell 0.2%.

On Wednesday, U.S. September retail sales showed a drop for the first time in seven months, while a report from the U.S. Federal Reserve described the economy’s progress in cautious terms.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.4% to 97.365.

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