Pound rebounds after Brexit upheaval rout

London, UK Updated: Nov 16, 2018, 06:39 PM(IST)

File photo. Photograph:( AFP )

Story highlights

The pound rebounded slightly Friday after Britain's currency was hammered by Brexit fears, while stock markets diverged and oil prices rallied once more.

The pound rebounded slightly Friday after Britain's currency was hammered by Brexit fears, while stock markets diverged and oil prices rallied once more.

Around 1145 GMT, the pound was up about 0.35 per cent against the dollar and euro.

The UK currency had slumped 1.7 per cent against the dollar on Thursday, the biggest drop for more than two years.

The same day, the euro jumped 1.9 per cent against the pound, its strongest performance since June 2016, or immediate aftermath of the Brexit referendum.

"Stability in the pound... could be short-lived, with clamours for a vote of no confidence from Conservative Brexiteers meaning the political upheaval will continue as we end the week," noted Joshua Mahony, market analyst at IG trading group.

British Prime Minister Theresa May faced the public on Friday to defend her Brexit deal as she battles to salvage the agreement and her own political future.

May made a rare outing on a radio phone-in during which she faced a call to step down after a tumultuous Thursday in which ministers resigned and members of her own party plotted to oust her.

Brexiteer MPs fear the draft deal would keep Britain shackled to the Brussels, while EU supporters say it would leave the UK on worse terms than it has inside the bloc.

Elsewhere on Friday, European stock markets traded narrowly mixed.

European Central Bank President Mario Draghi on Friday said that he saw "no reason" why growth in the eurozone should wither even after a sharp slowdown in the third quarter.

Asian stock markets meanwhile swung throughout Friday as investors weighed China-US trade speculation.

Hopes that the world's top two economies are making efforts to resolve their painful tariffs standoff provided support to global markets, though conflicting reports were keeping any optimism in check.

On Thursday it was reported that China had handed the US a number of trade concessions as part of a move to smooth relations ahead of a G20 summit where Donald Trump is expected to meet Chinese President Xi Jinping.

The Financial Times said the two sides were stepping up efforts and that US Trade Representative Robert Lighthizer had told business leaders the next round of tariffs would be put on hold. While Lighthizer's office denied that, observers said the news still provided some hope.

In commodities trading, oil prices rose strongly, having been hammered by oversupply and weak demand concerns earlier this week.

Despite data showing another jump in US stockpiles the commodity is enjoying some much-needed buying interest after kingpin Saudi Arabia said it plans to cut output and called on other producers to follow suit.

Adding to the upward pressure on crude futures are simmering tensions between Riyadh and Washington over the death of journalist Jamal Khashoggi, with the US imposing sanctions on several senior officials in the Saudi government.

Rob Thummel, managing director at Tortoise, said the imposition of the sanctions "puts some risk back into the market", which had been hit by a continuous build-up in US inventories.

Bitcoin meanwhile recovered to stand at $5,499.49.

Key figures around 1135 GMT

Pound/dollar: UP at $1.2812 from $1.2778 at 2200 GMT

Euro/pound: DOWN at 88.43 pence from 88.64 pence

Euro/dollar: UP at $1.1329 from $1.1325 

London - FTSE 100: DOWN 0.4 per cent at 7,012.05 points

Frankfurt - DAX 30: UP 0.1 per cent at 11,359.91

Paris - CAC 40: DOWN 0.1 per cent at 5,029.29

EURO STOXX 50: DOWN 0.1 per cent at 3,186.63 

Tokyo - Nikkei 225: DOWN 0.6 per cent at 21,680.34 (close)

Hong Kong - Hang Seng: UP 0.3 per cent at 26,183.53 (close)

Shanghai - Composite: UP 0.4 per cent at 2,679.11 (close)

New York - Dow: UP 0.8 per cent at 25,290.39 (close)

Oil - Brent Crude: UP $1.13 at $67.75 per barrel

Oil - West Texas Intermediate: UP 92 cents at $57.38

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