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Pound slips against euro and dollar as caution creeps back in | Business News

By October 14, 2019 No Comments
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The pound has fallen against the euro and the dollar today as doubtful Brexit talks appeared to slow, after an upbeat end to last week that saw sterling and stocks soar.

The FTSE 250, which rose by as much as 3% on Friday, shed some of its gains as hopes that a Brexit deal could be finalised this week appeared to fade.

“After last Friday’s stellar rally for UK-focused companies, the FTSE 250 takes a big step back at the start of the new trading week,” Russ Mould, investment director at stockbroker AJ Bell said.

“The big fallers among the UK mid-caps included Royal Mail, down 3.5% to 218.1p, one of the companies included in Labour’s renationalisation plans which would cost £196bn in total, according to the Confederation of British Industry.”

Mr Mould added that the pound had failed to sustain its rally – it has fallen 0.65 per cent against the dollar to $1.256.

Sterling also slid by 0.5% against the euro on Monday, and while it has since strengthened, it is still below the high of last week.

Sterling rose to a three-month high versus the dollar on Friday afternoon, hitting $1.27 after EU Council president Donald Tusk said he had seen “promising signals” about the possibility of a deal being reached.

Against the euro, the UK currency soared as much as 1.4% to 87.20 pence.

The FTSE 100, which is more internationally-focused than the FTSE 250, dropped by 0.56% after the weekend.

“The FTSE 100 slipped 0.4% to 7,218 with banks, housebuilders and supermarkets among the biggest fallers – having been among the biggest risers in last week’s stock market rally,” Mr Mould said.

Shares in UK-focused lenders such as the Royal Bank of Scotland and Lloyds Banking Group made large gains of more than 10% last week.

Globally, Chinese economic data was weaker than expected when released on Monday, with US dollar-denominated exports falling by 3.2% in September as the country’s trade war with the US begins to bite.

Imports dropped by 8.5% during the same period, worse than the 5.2% that economists predicted ahead of the announcement.

China is currently in talks with the US in an attempt to bring an end to the pair’s trade war.

The talks appeared to have already yielded some success, as President Donald Trump said the US would halt a planned increase in tariffs on $250bn worth of Chinese goods in return for China’s pledge to buy agricultural products worth between $40bn and $50bn.

Hopes of a trade deal spurred a strong stock market rally in the US on Friday.

However reports emerged on Monday that China wanted more talks before signing off on “phase one” of the agreement, sending stocks modestly lower again.

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