Finance

Sterling hammered on Brexit reports, Asia markets sink

Sterling hammered on Brexit reports, Asia markets sink May 15, 2018Leave a comment
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HONG KONG (China): The pound struggled at 32-year lows contrary to the dollar in Asia on Monday after reports said British Prime Minister Theresa May was able to consider the country out of your European from a so-called “hard Brexit”.

Sterling’s retreat included losses of all Asian stock markets as investors nervously await Donald Trump’s inauguration speech on Friday, previously being left disappointed at his absence of detail on economic policy at a news conference a couple weeks ago.

A range of Sunday newspapers in great britain said May was prepared retrieve within the single market, the eu customs union as well as the European Court of Justice, so as to regain management of immigration.

The news sent sterling plunging to US$1.1986, its lowest since October’s “flash crash” that sent it to US$1.1841 – a quantity not seen because beginning of 1985.

The unit later pared a few of the losses to sit just above US$1.20.

“The weekend reports were undoubtedly the ingredient that pushed the pound down,” said Nomura forex strategist Yoshitaka Suda.

“Markets are watching what Britain does.”

The reports come as May prepares to grant a delivery Tuesday around the government’s strategy on leaving the EU.

The PM aims to launch 2 years of departure talks when she triggers the content 50 exit process after March, although a legitimate challenge still is pending before the country’s Supreme court.

“Industry is positioning for quite a few fairly punchy rhetoric from Theresa May this thought of hard Brexit as well as a clean break from the single market seems increasingly likely,” Chris Weston, Melbourne-based chief market strategist at IG Ltd, told Bloomberg News.

“The odds of volatility here is now superb.”

Regional stock markets were also being forced as dealers sit up for Trump’s inauguration Friday with uncertainty. World equities surged after his election win in November on bets his plans for giant infrastructure spending and tax cuts would fire the world’s top economy, and also the international economy.

But the issue of any definitive plan eventually week’s briefing left many scratching their heads and worrying might not fulfill his promises.

Tokyo ended the morning session 0.9% lower, while Hong Kong shed 0.9% and Shanghai quit 0.7%.

Seoul lost 0.5%, Singapore retreated 0.3% and Taipei slipped 0.9%, although Sydney edged up 0.5%.

-AFP

 

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