Pound Advances Before Controversial Internal Market Bill

Pound Advances Before Controversial Internal Market Bill

The pound appreciated against its major rivals in the European session on Monday, ahead of the debate on the Internal Market Bill due today amid opposition against the controversial plans.

The legislation violates the withdrawal agreement signed in January, souring relations between London and Brussels.

It will override the Northern Ireland protocol, which requires the island of Ireland to follow EU rules in the event of a no deal Brexit.

Several members of the Conservative Party said that they will vote against the bill or abstain to block it from proceeding through Parliament.

Investors await the Bank of England’s monetary policy decision due this week for more direction. Although the central bank is expected to leave the policy rate and QE unchanged, it is likely to signal further easing amid cloudy economic outlook.

The pound edged up to 0.9213 against the euro, after falling to 0.9262 at 5:15 pm ET. Next key resistance for the pound is seen around the 0.90 region.

Data from Eurostat showed that Eurozone industrial production grew at a slightly faster than expected pace in July, as the economy attempts to sustain its recovery from the slump caused by the coronavirus, or Covid-19, pandemic.

Industrial production rose 4.1 percent from June, when it grew 9.5 percent, which was revised from 9.1 percent reported initially. Production gained for a third straight month.

The pound recovered from a 1-1/2-month low of 135.44 against the yen, with the pair trading at 136.55. The pound is seen finding resistance around the 138.00 level.

The pound rose to 1.1687 against the franc, from a low of 1.1615 seen at 5:00 pm ET. Further uptrend may take the pound to a resistance around the 1.19 area.

Extending early rally, the U.K. currency hit 1.2897 versus the greenback, marking a 4-day high. Continuation of the pound’s uptrend may take it to a resistance around the 1.31 level.