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Pound resilient as Brexit plot thickens
NEW YORK, Sept 11, 2019 (BSS/AFP) – The pound strengthened against both
the dollar and the euro on Tuesday as investors took heart from legislation
blocking a no-deal Brexit.
Sterling also received a boost from stronger British economic growth than
markets had been expecting and statistics showing unemployment at a 45-year
low.
This in turn fueled expectations that the Bank of England will refrain
from cutting rates, something which could undermine the already embattled
currency further still.
“With the risk of an imminent no-deal Brexit declining, the market is now
pricing less aggressive easing from the Bank of England,” said Petr Krpata,
strategist at ING, saying this had allowed sterling to outperform its peers.
European stock markets, meanwhile, drifted sideways, awaiting a key
European Central Bank meeting this week, while US markets ended a choppy
session little changed.
Apple got a boost as it unveiled new iPhones, including a lower-priced
offering, and set launch dates for its original video offering, Apple TV+,
and its game subscription service.
The British parliament is now suspended, which could lead to a period of
relative Brexit calm, analysts said.
“With no more parliamentary sessions due for five weeks, the focus now
turns to the prospects of a new deal being negotiated between the UK and the
EU,” said XTB analyst David Cheetham.
British Prime Minister Boris Johnson failed again late on Monday to get
MPs to back a snap election.
But City Index analyst Fiona Cincotta cautioned that the pound remains
fragile.
“With no resolution to Brexit or any sense of control returning to UK
politics, the pound could struggle to keep its head above water in the coming
sessions,” she said.
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Europe’s main stock markets showed mild gains at the close as investors
mulled speculation that the ECB could deliver economy-boosting measures on
Thursday.
“Traders are playing the wait-and-see game in relation to the ECB
meeting,” noted CMC Markets analyst David Madden.
“To a certain extent, some form of monetary easing from the ECB has been
priced in.”
– Key figures around 2050 GMT –
Pound/dollar: UP at $1.2357 from $1.2346 at 2100 GMT
Euro/pound: DOWN at 89.37 pence from 89.49 pence
Euro/dollar: DOWN at $1.1042 from $1.1048
Dollar/yen: UP at 107.53 yen from 107.24 yen
New York – Dow: DOWN 0.3 percent at 26,909.43 (close)
New York – S&P 500: UP less than 0.1 percent at 2,979.39 (close)
New York – Nasdaq: DOWN less than 0.1 percent at 8,084.16 (close)
London – FTSE 100: UP 0.4 percent at 7,267.95 points (close)
Frankfurt – DAX 30: UP 0.4 percent at 12,268.71 (close)
Paris – CAC 40: UP 0.1 percent at 5,593.21 (close)
EURO STOXX 50: UP 0.1 percent 3,498.99 (close)
Tokyo – Nikkei 225: UP 0.4 percent at 21,392.10 (close)
Hong Kong – Hang Seng: FLAT at 26,683.68 (close)
Shanghai – Composite: DOWN 0.1 percent at 3,021.20 (close)
Brent North Sea crude: DOWN 0.3% at $62.38 per barrel
West Texas Intermediate: DOWN 0.8% at $57.40 per barrel
BSS/AFP/HR/1015