Daily Management Review

31- Year Low for Pound on Brexit Hard Landing Fears


10/04/2016




31- Year Low for Pound on Brexit Hard Landing Fears
A revitalized dollar, boosted by resurgent U.S. interest rate hike expectations, and Brexit worries resulted in Britain’s pound slumping to a three-decade low.
 
Hit by a growing sense that the UK may be heading for a 'hard' Brexit where it severs links to the EU's single market in favor of total control over immigration, Sterling dropped to its weakest since 1985.
 
After the pound’s fall on Monday, it reached $1.2764  and a three-year low of 87.51 pence per euro as even a robust construction data couldn't prevent another 0.5 percent fall for the pound.
 
"It is now abundantly clear that access to the single market is not on (UK Prime Minister) Theresa May's list of top priorities and the market is realizing that... there is more pressure for the pound in the weeks and months ahead," said UniCredit's Global Head of FX Strategy, Vasileios Gkionakis.
 
Based on the assumption that a weaker pound would boost firms' exports, London's FTSE cheered the idea as it rose 1 percent.
  
Asian shares had finished higher too. Japan's Nikkei leading the way with a 0.8 percent gain after an upbeat U.S. manufacturing survey bolstered the dollar and lowered the yen, Japan's Nikkei lead the way as Asian shares had finished higher too.
 
After a two-month run of negative surprises, the data was helping stabilize its economic surprise index, Royal Bank of Canada said. A more than 60 percent chance the Fed inches up U.S. interest rates before the end of the year is being pinned by the Futures markets.
 
The dollar index added 0.3 percent to 95.970m hitting a near 2-week high. it tracks the currency against a basket of six major peers. It was last at 102.495 yen  and worth $1.1171 per euro. 
 
UK Gilt yields nudging up to 0.75 percent and southern euro zone yields squeezed higher as Italy announced it was selling its first 50-year bond as the bond markets presented results with U.S. Treasuries steady at 1.62 percent after two days of rises.
 
Following sharp gains overnight as Iran urged other oil producers to join OPEC in supporting the market, crude oil futures took a breather among commodities.
 
After closing up 1.2 percent on Monday, U.S. crude was down 0.6 percent at $48.52 a barrel.
 
Gold was left at as low as $1,307.15 as the dollar's strength dulled its appeal.
 
"Despite the fact that we saw different types of crisis from Deutsche Bank to Brexit, we can see that prices haven't gone beyond the resistance at $1,350," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
 
"It is a pessimistic sign that even the speculators could not capitalize on the so-called bad news."
 
After Australia's central bank kept its main interest rate at 1.5 percent after cuts in May and August, Australia's dollar barely budged and its main share market ended 0.1 percent higher.
 
"We think the case for no more cuts is strengthening. Economic growth is strong, commodity prices have risen, and the drag from the mining investment decline is set to fade," said Paul Bloxham, chief economist Australia at HSBC.
 
(Source:www.reuters.com)






Science & Technology

Samsung Galaxy Fold: Expensive but fragile

USA and South Korea launch the first commercial 5G networks

Deliveries of AR/VR devices to grow by 54% in 2019

Anti-Stall System Got Activated Before Crash In The Ethiopian 737 MAX Craft: Reuters

Google’s Global Council To Advocate On AI Ethics

US wants to send astronauts to the moon by 2024

Apple shows new entertainment services

Large U.S. Study Finds Detection Of Irregular Heart Beat By Apple Watch

Apple to present Netflix competitor at the end of March

Live Human Under-Skin Chip Implantation Takes Place At Barcelona

World Politics

World & Politics

Foxconn Head Gou Could Run For Taiwan President Election Next January

France opposes EU-US trade negotiations

United States and China to implement trade agreement

Norway's largest party to ban oil production near Lofoten Islands

Estonia's euroskeptics are about to join the government

Eastern Europe wins in double food standards fight

White House Received New Sanctions’ Package For Russia: Bloomberg

EU will stop saving migrants in the Mediterranean