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Pound falls as ‘hard’ Brexit seen as more likely
NEW YORK, Jan 30, 2019 (BSS/AFP) – The pound tumbled against the dollar
and euro on Tuesday after the British parliament rejected a proposal to delay
Brexit.
On a mixed day for global stocks, the trajectory of Britain’s departure
from the European Union was as murky as ever after a series of votes in
parliament that included a rejection of a proposal to order the Prime
Minister Theresa May to delay the exit if no new deal with the EU emerged by
February 26.
Parliament then went on to vote 317 to 301 in favor of the amendment
asking May to replace the deal’s so-called backstop provision preventing a
hard border with Ireland — a proposal immediately rejected by an EU
spokesman.
Near 2130 GMT, the pound was at $1.3069, down 0.7 percent compared with
Monday night and a similar amount against the euro.
Boris Schlossberg, a foreign exchange analyst at BK Asset Management, said
the EU and British parliament were in a “game of chicken” over terms to avoid
a so-called “hard Brexit,” where Britain exits the bloc without a deal.
Britain is currently scheduled to leave the union on March 29.
“There is a bigger chance than before than before that we could end up
with a hard Brexit,” Schlossberg told AFP, adding that such an outcome was
still unlikely.
“The risks have increased because time is ticking and nobody seems to have
a realistic solution right now.”
Earlier, European bourses all finished higher, with London’s FTSE 100
index up 1.3 percent and Paris and Frankfurt also gaining.
US stocks finished mostly lower, with the Nasdaq falling 0.8 percent
ahead of a slew of major tech earnings.
Apple slipped 1.0 percent in after-hours trading after reporting first-
quarter of earnings of $20 billion, roughly the same as in the year-ago
period. Apple also lost 1.0 percent during the session.
Amazon, Microsoft, Facebook all lost at least two percent during the
session ahead of results later this week.
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Besides a heavy earnings calendar, investors are anticipating Wednesday’s
Federal Reserve policy announcement.
The Fed has in recent weeks signaled a cautious approach to lifting
interest rates, a key factor in the market’s rally since late December.
Markets are also looking ahead the resumption of trade talks between China
and the United States.
Some analysts viewed the prospects for a Beijing-Washington agreement as
dimming after the US Justice Department on Monday announced criminal charges
against Chinese telecommunications giant Huawei.
But Treasury Secretary Steven Mnuchin said the Huawei matter was
unconnected to the trade negotiations, adding in a Fox Business interview he
expected “significant” progress in the talks.
– Key figures around 2130 GMT –
New York – Dow: UP 0.2 percent at 24,579.96 (close)
New York – S&P 500: DOWN 0.2 percent at 2,640.00 (close)
New York – Nasdaq: DOWN 0.8 percent at 7,028.29 (close)
London – FTSE 100: UP 1.3 percent at 6,833.93 (close)
Frankfurt – DAX 30: UP 0.1 percent at 11,218.83 (close)
Paris – CAC 40: UP 0.8 percent at 4,928.18 (close)
EURO STOXX 50: UP 0.5 percent at 3,153.42 (close)
Tokyo – Nikkei 225: UP 0.1 percent at 20,664.64 (close)
Hong Kong – Hang Seng: DOWN 0.2 percent at 27,531.68 (close)
Shanghai – Composite: DOWN 0.1 percent at 2,594.25 (close)
Pound/dollar: DOWN at $1.3069 from $1.3163 at 2200 GMT Monday
Euro/pound: UP at 87.48 pence from 86.83 pence
Euro/dollar: UP at $1.1435 from $1.1428
Dollar/yen: DOWN at 109.34 yen from 109.35
Oil – Brent Crude: UP $1.39 at $61.32 per barrel
Oil – West Texas Intermediate: UP $1.32 at $53.31 per barrel
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