Res­ig­na­tion and DUP weigh pound

Irish Examiner - - Business - Ea­mon Quinn

Ster­ling stum­bled yes­ter­day as UK trans­port min­is­ter Jo John­son re­signed, say­ing he wants a new Br exit ref­er­en­dum, and the DUP clashed with prime min­is­ter Theresa May over po­ten­tial plans for the Bor­der.

Against the euro, it fell about 0.3% to 87.25 pa nd traded at $1.2977.

How­ever, The Ft se -100 in­dex which tends to gain when the UK cur­rency weak­ens, was weighed down with most other stock­mar­kets over fears about the out­look for the world econ­omy.

The Iseq Over­all in­dex of Ir­ish shares re­treated by al­most 0.5%.

The res­ig­na­tion of her trans­port min­is­ter, who is Boris John­son’s brother but who had none­the­less voted in 2016 for the UK to re­main in the EU, may in­crease the dif­fi­cul­ties for May in get­ting any Brexit agree­ment through the Com­mons.

“The week has passed with­out fur­ther progress on a Brexit deal, and the af­ter­noon has be­come more in­ter­est­ing as Jo John­son re­signs from the gov­ern­ment, call­ing for a sec­ond ref­er­en­dum.

“Even if some sort of deal emerges soon, it will still have to clear par­lia­ment, and it is by no means cer­tain that such an out­come will tran­spire,” said Chris Beauchamp, chief mar­ket an­a­lyst at on­line bro­ker IG.

Ster­ling will take its cue next week from UK eco­nomic data but “the main story is still the un­cer­tain fate of the UK’s re­la­tion­ship with Eu­rope”, said Beauchamp.

Fiona C in cotta , se­nior mar­ket an­a­lyst at City In­dex, said the Ft se -100 stocks failed to tap a po­ten­tial boost from a weaker ster­ling.

“Brexit op­ti­mism which had buoyed the pound over re­cent ses­sions was start­ing to run dry by Fri­day.

“Af­ter a week of ru­mours and re­ports that a Brexit deal was just days away, pound traders now want to see ev­i­dence. Un­til there is some­thing more sub­stan­tial to go on, the pound could re­main un­der pres­sure,” she said. Fall­ing oil prices added to fears about the world econ­omy.

A sell­off in tech stocks added to the fall for US stocks. Af­ter fall­ing 62c in Lon­don, the price of Brent crude just about kept above $70.

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