Forex – Dollar Extends Losses as Pound Rally Continues

0 – The dollar extended losses against a currency basket on Thursday as a rally in the pound continued on the back of hopes that the UK and the European Union are making progress in Brexit talks.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.81% to 96.12 by 10:53 AM ET (14:53 GMT) after gaining 2.3% in October.

Sterling built on early gains, with GBP/USD up 1.46% to 1.2950.

The pound was bolstered by reports that the UK and the EU are close to a deal that will allow UK financial services companies based in the UK to have continued access to European markets after Brexit, although reports were played down in London and Brussels.

Sterling received an additional boost after the Bank of England indicated that there are scenarios where interest rates could still need to rise in the event of a no-deal Brexit.

The BoE left interest rates on hold in a unanimous decision earlier Thursday and warned that uncertainty over Brexit is weighing on the economy.

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