Pound skids to 31-year low on Brexit anx­i­ety

> On talk of a fresh US rate hike mixed with wor­ries about Brexit

The Sun (Malaysia) - - SUNBIZ -

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.

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