Pound skids to 31-year low on Brexit anxiety
> On talk of a fresh US rate hike mixed with worries about Brexit
LONDON: The pound slumped to a 31-year low against the dollar ysterday on concerns over the timing and terms of Britain’s planned exit from the European Union (EU), traders said.
Britain’s currency also struck a fresh three-year low point against the euro, while the drops helped pushed London’s benchmark FTSE 100 stocks index up to a 16-month high beyond 7,000 points at the open.
While the British economy has showed signs of improvement in the months since the shock vote to leave the EU (Brexit), there are concerns about the wider long-term impact of the bloc losing its second-biggest economy.
British Prime Minister Theresa May announced at the weekend that her government would start the process of leaving the EU within the next six months – possibly leading to Britain severing ties with the single market.
The pound yesterday struck US$1.2740 – its lowest level since 1985.
Sterling meanwhile traded at 87.66 pence to the euro – the weakest level since 2013.
The FTSE rallied to a gain of 1.6% in morning deals.
In Asia, markets rose yesterday with Japanese stocks boosted by a weaker yen, while the pound also hit a new three-decade low against the dollar as talk of a fresh US rate increase mixed with worries about Brexit.
News showing the US manufacturing sector rebounded in September helped turn attention back to US monetary policy, days ahead of the release of a closely watched jobs report.
The Tokyo Stock Exchange’s Nikkei 225 closed 0.8% higher, just short of the previous day’s rise.
Stocks were also up elsewhere in Asia, despite some early wariness after a surge Monday – fuelled by easing worries about German financial titan Deutsche Bank.
Hong Kong climbed 0.5% while Singapore rose 0.3%, and Seoul added 0.6% as investors returned from a long weekend break. Sydney also added 0.1%. – AFP
Workers walking along a pathway at the nickel smelter of PT Vale Tbk, near Sorowako, Indonesia.