Pound Up As Brexit Party Decides To Stand Down Candidates In Tory Seats

The pound appreciated against its key counterparts in the European session on Monday, as the Brexit Party leader Nigel Farage announced that the party would not stand in previously Conservative held seats at the upcoming general election to boost Johnson's chances of a majority win.

Speaking in Hartlepool, Brexit party leader Farage said that the Brexit Party would not contest the 317 seats the Conservatives won at the last election in a bid to "prevent the risk of a second Brexit referendum".

Farage's decision is likely to boost prospects of Johnson making the gains he needed to win a majority.

Johnson welcomed Farage's decision, saying that another gridlocked hung Parliament is the greatest threat to get Brexit done.

Data from the Office for National Statistics showed that the UK economy recovered in the third quarter driven by services and construction.

Gross domestic product grew 0.3 percent sequentially in the third quarter after contracting 0.2 percent in the second quarter.

The currency showed mixed trading against its major counterparts in the Asian session. While it fell against the yen and the franc, it was steady against the euro and the greenback.

The pound spiked up to a 6-day high of 1.2898 against the greenback from Friday's closing value of 1.2773. Next key resistance for the pound is seen around the 1.30 level.

The pound climbed to a 4-day high of 140.48 against the yen, after falling to a 2-week low of 139.37 at 1:15 am ET. The pound is seen locating resistance around the 142.5 level.

Data from the Cabinet Office showed that Japan core machinery orders declined unexpectedly in September.

Core machinery orders, a leading indicator of private capital investment, declined 2.9 percent month-on-month, following a 2.4 percent drop in August.

The U.K. currency strengthened to 1.2819 against the franc, its biggest since October 29. On the upside, 1.31 is likely seen as its next resistance level.

The pound moved up to 0.8558 against the euro, a level unseen since May 6. The currency is likely to locate resistance around the 0.84 level, if it rallies again.

Data from Destatis showed that Germany's wholesale prices declined at the fastest pace in more than three years in October.

Wholesale prices fell 2.3 percent year-on-year in October, following a 1.9 percent drop in September. This was the biggest annual fall since May 2016.