Pound dives on increased no-deal Brexit prospect


NEW YORK, Aug 29, 2019 (BSS/AFP) – The pound fell against the dollar and
euro on Wednesday as Britain’s government moved to extend the suspension of
parliament, increasing the likelihood of a no-deal Brexit.

Meanwhile, global stocks had a mixed day, with Wall Street staging a late
rally, shrugging off its fears for the slowing world economy.

In London, British Prime Minister Boris Johnson announced that the annual
suspension of parliament would be extended until October 14 — just two weeks
before the UK is set to leave the European Union.

Britain’s currency slid by more than one percent against the dollar and
euro in early business, before paring some of the loss.

“The pace of sterling’s drop demonstrates yet again the currency’s
susceptibility to Brexit fears,” said Han Tan, market analyst at FXTM trading

The pound’s plunge helped London’s benchmark FTSE 100 index outperform as
it features many multinationals with most of their earnings in dollars —
whereas construction companies notably saw their shares take a tumble.

Anti-Brexit MPs said Johnson’s move amounted to a coup and a declaration
of war, branding the prime minister a dictator.

In New York, the gloom lifted as energy stocks benefitted from a plunge in
crude oil inventories, pointing to sustained demand for fuel, a sign of
economic health.

In light-volume, late-summer trade, Wall Street climbed out of the red and
rallied, casting aside worries about Brexit, the escalating US-China trade
war and Brexit.

Adam Sarhan said the lower prices early in the day had attracted bargain

“Every time the market fell off the last month, we’ve seen the buyers show
up and curb the selling,” he told AFP.

Earlier Wednesday, yields on 30-year Treasury bonds touched a fresh all-
time low while the spread between 2- and 10-year Treasury notes widened the
most since 2007, indicating waning confidence in the longer-term outlook and
drawing more attention to this closely-watched recession indicator.

Major European bourses fell. But a poll showed German consumer sentiment
is stabilizing after three months of decline and despite fears of a looming
recession in Europe’s biggest economy.

Energy shares also were supported by Iranian President Hassan Rouhani’s
call for the United States to lift all sanctions against his country before
he would meet Trump, after the US leader had said he would be open to talks.

In government bond markets, Italian bond yields fell below 1 percent,
their lowest level ever, on hopes that a new government can be formed without
fresh elections.

– Key figures around 2100 GMT –

Pound/dollar: DOWN at $1.2213 from $1.2288

New York – Dow: UP one percent at 26,036.10 (close)

New York – S&P 500: UP 0.7 percent at 2,887.94 (close)

New York – Nasdaq: UP 0.4 percent at 7,856.88 (close)

Euro/pound: UP at 90.67 pence from 90.25 pence

Euro/dollar: DOWN at $1.1076 from $1.1083 at 2100 GMT

Dollar/yen: UP at 106.14 yen from 105.77 yen

London – FTSE 100: UP 0.4 percent at 7,114.71 points (close)

Frankfurt – DAX 30: DOWN 0.3 percent at 11,701.02 (close)

Paris – CAC 40: DOWN 0.3 percent at 5,368.80 (close)

EURO STOXX 50: DOWN 0.2 percent at 3,365.38 (close)

Tokyo – Nikkei 225: UP 0.1 percent at 20,479.42 (close)

Hong Kong – Hang Seng: DOWN 0.2 percent at 25,615.48 (close)

Shanghai – Composite: DOWN 0.3 percent at 2,893.76 (close)

Brent North Sea crude: UP 98 cents at $60.49 per barrel

West Texas Intermediate: UP 85 cents at $55.78 per barrel