March 11, 2019 / 1:19 AM / 14 days ago

Dollar dips, sterling jumps as May scrambles to make Brexit deal

NEW YORK (Reuters) - The dollar was lower on Monday afternoon after mixed U.S. retail sales data, while the pound jumped after British Prime Minister Theresa May rushed to Strasbourg in a last-ditch attempt to avoid another defeat in UK parliament of her Brexit deal.

FILE PHOTO: People go about their day near Norway's central bank building in Oslo, Norway May 31, 2017. REUTERS/Ints Kalnins/File Photo

Just 18 days before Britain is due to leave the European Union, there is still no ratified deal and talks with the EU stalled over the weekend as May felt she was unable to break the political deadlock in London.

In a day of frenetic diplomacy ahead of the parliamentary vote scheduled on Tuesday, May spoke to European Commission President Jean-Claude Juncker in an effort to find a way through the Brexit maze.

After falling in the last eight sessions, the pound rose by as much as 1.1 percent and hit the day’s high of $1.317 as chances Britain will leave the group without a deal - an option known as a “hard Brexit” - had narrowed.

Prices were slightly lower in late afternoon trade after a BBC Newsnight political editor said on Twitter: “Cabinet minister tells me on Theresa May’s #Brexit negotiations in Strasbourg: It’s not looking good.”

The dollar index, which measures the greenback against a basket of six rivals, was modestly cheaper on Monday, last down 0.1 percent at 97.208. The Commerce Department reported that U.S. retail sales unexpectedly rose in January, lifted by an increase in purchases of building materials and discretionary spending, but receipts in December were much weaker than initially thought.

“The buck’s muted response stems from how poor spending the month before fit with the narrative of the economy losing altitude into the new year, a scenario that should keep U.S. interest rates grounded over the foreseeable future,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.

The euro rose modestly on the back of the dollar move, up 0.04 percent, last at $1.124.

The Norwegian crown climbed toward its highest levels in more than four months against its Swedish rival on Monday after strong inflation data raised expectations the central bank could increase interest rates as early as this month.

Against the dollar, the crown gained 0.8 percent to 8.666 crowns per dollar. It rose by 0.8 percent against the euro at 9.742 crowns per euro.

(GRAPHIC: Euro positions - tmsnrt.rs/2F2xNo4)

(GRAPHIC: EURNOK and Norway Inflation - tmsnrt.rs/2Cik3DP)

Reporting by Kate Duguid and Saikat Chatterjee; Editing by Sonya Hepinstall

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