Sterling gyrates as British PM puts job on line

AFP New York, NY, USA Mar 28, 2019, 07.00 AM(IST)

File photo. Photograph:( Reuters )

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Theresa May had pledged to step down if parliament backed her EU divorce deal, which did not happen. 

The British pound gyrated Wednesday, initially rallying on Prime Minister Theresa May's dramatic appeal for her Brexit plan but later walking back the gains.

May pledged to step down if parliament backs her EU divorce deal, a vow that immediately boosted the British currency against the dollar and euro.

The dramatic gambit, just ahead of votes on last-minute Brexit alternatives to replace May's twice-rejected deal, pushed the British pound to close to $1.3270. 

However, the pound was back down at $1.3189 at 2100 GMT as the prospects for May's plan still looked dicey, with the hard-line Democratic Unionist Party in Northern Ireland continuing to balk at the proposal.

British MPs also voted late Wednesday against eight alternative Brexit options aimed at overcoming the deadlock over May's unpopular divorce deal.

The latest Brexit travails came on a mixed day for global stocks, with Wall Street again wobbling on worries about slowing global growth.

Investors have been weighing how seriously to view a big drop in 10-year US Treasury bond yields in recent session, traditionally a sign of medium- and long-term economic weakness.

The yield on the 10-year US Treasury note on Wednesday fell to its lowest level since December 2017.

The Dow Jones Industrial Average dipped 0.1 percent to finish at 25,625.59, about 200 points above its session lows earlier in the day.

"Buyers showed up during the second part of the session," said Adam Sarhan of 50 Park Investment, who considers the market's jitters over bond yields overblown.

But "if the bond market is right, then the stock market can go down further," Sarhan added.

Among individual companies, Boeing rose 1.0 percent  as it unveiled proposed changes to flight software on its 737 MAX aircraft, which have been grounded following two deadly plane crashes in five months. 

Boeing's plan came as the head of the Federal Aviation Administration, which must approve the fixes, faced tough questioning from Congress concerning its certification of the planes.

Earlier, European equities finished little changed, while Asian equities mostly rose.