Pound jumps on Brexit hopes as global stocks firm

NEW YORK: The British pound hit a seven-week high against the dollar on Friday amid easing fears of a no-deal Brexit.

Stock markets, meanwhile, won support after China said some US agricultural products including soybeans would be exempt from added tariffs, ahead of trade talks between Beijing and Washington scheduled for October.

After flirting with new records, US stocks treaded water as investors awaited the outcome of next week’s monetary policy meeting of the Federal Reserve, which is widely expected to deliver the second interest rate cut of the year.

50 Park Investments’ Adam Sarhan told AFP the day’s subdued trading was a “normal and healthy action after a big rally.”

“This is the perfect area for the market to pause before it tries to reach new highs,” he said.

Beijing’s trade announcement was the latest in a new series of conciliatory measures between the world’s two biggest economies, which for the past year have been locked in a bitter trade war, resulting in tit-for-tat tariffs on hundreds of billions of dollars in bilateral trade.

In foreign exchange, the pound was in focus after the British currency jumped to its highest level since late July.

The pound “has rallied… as traders are less fearful about the possibility of a no-deal Brexit,” said CMC Markets analyst David Madden.

Parliament passed a law earlier this month aimed at preventing a no-deal Brexit, but Prime Minister Boris Johnson is adamant Britain will still leave the EU on schedule on October 31 with or without a withdrawal agreement.

The speaker of Britain’s House of Commons, John Bercow, said disobeying the law “would be the most terrible example to set to the rest of society.”

In a speech in London on Thursday, Bercow warned that if the government came close to doing so, parliament “would want to cut off such a possibility and do so forcefully.”

In equities markets, all key European indices ended the day higher, while Wall Street had a split finish after an extended rally this week.

The benchmark Dow posted its eighth consecutive positive close, the longest winning streak in more than a year.

Equities rose in Asia after the European Central Bank (ECB) on Thursday unveiled a fresh round of economic stimulus and another interest rate cut.

The ECB said it would restart its bond-buying programme to boost liquidity, provide support for struggling banks and reduce borrowing costs deeper into negative territory in a bid to kick-start lending.

“In the end, it wasn’t a big bazooka, but ECB President Mario Draghi did his level best trying to convince investors that monetary policy will remain extremely accommodative for some considerable time to come,” said National Australia BankSenior Market Strategist Gavin Friend.

'Around 5,000 finance jobs could have been moved from the UK by the time the country departs the European Union'

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    Original news : https://tribune.com.pk/story/2056664/2-pound-jumps-brexit-hopes-global-stocks-firm/