Sterling targets weekly gain against dollar

The British pound stabilized against the US dollar during the European session on Friday, to stay rangebound but on the cusp of posting a weekly gain, as the US dollar rally hit a pause, in addition to upbeat news about the UK election, and rising expectations for the Conservative Party (ruling party) to bag the majority in the December 12 election.

GBP/USD held at $1.2877 as of 07:10 GMT, after opening at $1.2881, with an intraday high of $1.2885 and a low of $1.2875.

Sterling gained 0.25% against the US dollar yesterday, its first gain in three days, as the retreat in the US dollar offset the unexpected drop in British retail sales during October.

During this week, the British pound gained 0.8% against the US dollar so far, to head for its second weekly gain in the last three weeks, thanks to the US dollar rally hitting a pause, in addition to upbeat news about the UK election.

The dollar index fell on Friday by less than 0.1%, to deepen its losses for the second straight day, on the continued profit-taking from a 4-week high, to reflect a pause of its rally against a basket of currencies.

The Brexit Party stated that it will not compete in the next parliamentary elections for seats won by the conservatives in the previous parliament, which is a big boost for Prime Minister Boris Johnson ahead of the elections in December 12.

The Brexit party leader, Nigel Farage, said that he does not want the anti-Brexit parties to win, so his party will not present candidates to compete on the seats won by Conservatives in the 2017 election.

Most expectations currently suggest that UK's ruling Conservative Party may win a majority in the December 12 election, which raised hopes about a breakthrough of the Brexit crisis ahead of January 31, and the latest deal by PM Boris Johnson with EU to be passed in the next British Parliament.