sterling hovers near-20 month lows amid Brexit drama

Market focus is largely attuned to global trade developments, after Beijing confirmed it was still in talks with Washington in an effort to broker a comprehensive trade agreement.

Chinese Vice Premier Liu reportedly said Tuesday that he had been in discussion with U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer, with the aim of de-escalating a global trade war.

Chinese equities rose slightly on the news, while MSCI’s broadest index of Asia-Pacific shares, excluding Japan, was down around 0.1 percent.

Back in Europe, overall sentiment remained relatively fragile amid deepening political turmoil over the U.K. government’s proposed Brexit deal. Prime Minister Theresa May abruptly postponed a parliamentary vote on Monday, sending sterling down to 21-month lows.

The U.K. currency was trading at around $1.2566 against the U.S. dollar ahead of Tuesday’s opening bell.

On the data front, the U.K. is scheduled to publish unemployment rate figures for October at around 9:30 a.m. London time, while Germany’s ZEW economic sentiment index for December is set to follow slightly later in the trading session.

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