STOCK MARKET BSE NSE

Pound surges as post-Brexit transition deal sealed

The pound rose Monday after Britain and the EU reached a landmark deal on a two-year transition after Brexit that will buy businesses and citizens time to adjust to life after the divorce.

Published: 19th March 2018 08:33 PM  |   Last Updated: 19th March 2018 08:33 PM   |  A+A-

By AFP

LONDON: The pound rose Monday after Britain and the EU reached a landmark deal on a two-year transition after Brexit that will buy businesses and citizens time to adjust to life after the divorce.

World stocks jittered, meanwhile, ahead of a feared US interest rate hike later this week, as concerns of a possible trade war sparked by US President Donal Trump's announcement on tariffs also weighed.

Rocking the US market were Facebook's shares plummeting 5.0 percent following reports of a large data breach.

"Concerns over the potential for a Trump trade war still seem to be weighing on the minds of investors, with a lack of risk appetite still leading to caution in global stock markets," FXTM research analyst Lukman Otunuga said.

Trump's taxes on imports worldwide are to come into effect on March 23, with the exception so far of Canada and Mexico, which have won exemptions from the US.

EU Trade Commissioner Cecilia Malmstroem is heading to Washington to seek a similar exemption after the bloc threatened to hit flagship US products including peanut butter, orange juice and bourbon whiskey with countermeasures.

The pound found strength in a deal reached Monday between Britain and the EU on a transition period between March 29, 2019 and December 31, 2020.

Crucially, the transition will give Britain and Europe more time to agree on a trade deal.

Weighed down by the stronger currency the London FTSE 100 benchmark underperformed its European peers as a strong pound stands to hurt exporters.

Stock markets elsewhere dropped because of trade war fears, and the tariffs are set to overshadow the two-day meeting of the world's richest 20 nations in Buenos Aires, beginning on Monday.

'Rocky start'
"It's been a rocky start to trading at the start of the week, as the prospect of a trade war becomes ever more real," said OANDA analyst Craig Erlam.

"Tariffs are likely to be the main topic of conversation at the G20 meeting."

Sentiment was cautious before interest rate decisions this week from both the US Federal Reserve and the Bank of England, on Wednesday and Thursday respectively.

The Fed gathering will be the first under the stewardship of new boss Jerome Powell.

"The stress of what's to come -- especially Wednesday's potentially rate-hiking Fed meeting -- combined with a lack of distraction and the ongoing political instability in the US contributed to a pretty damn duff start to the week for the European indices," added Spreadex analyst Connor Campbell.

The US central bank is expected to raise interest rates again but Powell's remarks will be closely followed for clues about future increases, with some predicting another three this year in light of an improving economy.

Investors are also keeping an eye on Washington, following another outburst by Trump against a probe by special counsel Robert Mueller.

There are some fears that Trump is planning to fire Mueller, who is investigating claims of Russian meddling and collusion with the tycoon's campaign in the 2016 presidential election.

Key figures around 1345 GMT
New York - Dow: DOWN 0.8 percent at 24,743.27 points

London - FTSE 100: DOWN 1.3 percent at 7,067.93

Frankfurt - DAX 30: DOWN 1.0 percent at 12,265.72

Paris - CAC 40: DOWN 0.6 percent at 5,248.99

EURO STOXX 50: DOWN 0.8 percent at 3,411.61

Tokyo - Nikkei 225: DOWN 0.9 percent at 21,480.90 (close)

Hong Kong - Hang Seng: FLAT at 31,513.76 (close)

Euro/dollar: UP at $1.2307 from $1.2286 at 2100 GMT

Pound/dollar: UP at $1.4057 from $1.3936

Dollar/yen: UP at 106.22 yen from 105.97 yen

Oil - Brent North Sea: FLAT at $65.71 per barrel

Oil - West Texas Intermediate: DOWN 14 cents at $62.11



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp