FXpert

London and Brussels are nearing the Brexit endgame, but sterling may be subject to big swings regardless of whether they soon cut a deal - keeping investors looking to bet on the next big direction for the currency on their toes.

Sterling held near a one-week low on Monday as Brexit negotiations faltered before a crucial European Union summit later this week.

The U.S. dollar dipped on Monday after retail sales data for September missed economists’ expectations, and as benchmark U.S. Treasury yields consolidated after hitting seven-year highs last week.

Saudi Arabia's currency fell to its lowest level in two years and its international bond prices slipped on Monday over fears that foreign investment inflows could shrink as Riyadh faces pressure over the disappearance of journalist Jamal Khashoggi.

Sterling weakened on Friday as investors booked profits after a rally that has left the British currency poised for a second consecutive week of gains on growing optimism about an agreement on a Brexit deal at a European Union Summit next week.

The dollar climbed on Friday against a basket of currencies as global equity prices rebounded from a six-day rout and robust Chinese export figures soothed some worries about the world's second-biggest economy and its trade war with Washington.

Sterling rose half a percent to trade above $1.32 on Wednesday after European Union Brexit negotiator Michel Barnier signalled progress on a deal with the UK over its withdrawal from the bloc, as well as on the crucial Irish border question.

Sterling <GBP=D3> hit a new 3-1/2 month high versus the euro and added to gains against the dollar on Wednesday on optimism that Britain and the European Union can agree a Brexit deal soon.