Sterling Bounces On Brexit Uncertainty

Sterling bobbed up and down Wednesday as Brexit-related reports that kept traders guessing about how the situation was developing, dealers said

London, (UrduPoint / Pakistan Point News - 16th Oct, 2019 ) :Sterling bobbed up and down Wednesday as Brexit-related reports that kept traders guessing about how the situation was developing, dealers said.

In what has already been a topsy-turvy week, the pound slid lower early in the day only for renewed hopes for a deal to catapult the unit to its highest levels against the Dollar and euro since May.

"There have been many twists and turns in the Brexit story, but the latest developments suggest that negotiations are heading in the right direction," said analyst David Madden at CMC Markets.

European Council president Donald Tusk told Poland's TVN24 news channel: "The basic foundations of an agreement are ready and in theory tomorrow we could accept this deal with Great Britain and avoid the chaos and the misfortune linked to an uncontrolled, chaotic exit.

"Theoretically, in seven or eight hours everything should be clear," Tusk added.

The European Union's chief Brexit negotiator Michel Barnier warned senior officials earlier however that "significant issues" remain in the way of efforts to reach a deal with London on the eve of a key summit.

London stocks fell back as the pound's rise undemined blue-chip companies that make most of their earnings in foreign currencies.

Asian and other European stock markets experienced mixed fortunes meanwhile, as traders eyed signs of China-US tensions over Hong Kong.

In the US, stocks were slightly higher in midday trading, while oil prices jumped higher amid uncertainty over global demand for crude oil.

- 'Tentative optimism' for deal - Irish Prime Minister Leo Varadkar, speaking before leaders of EU member states meet on Thursday and Friday, said he remained hopeful that Britain would secure a deal.

Officials said talks could always resume next week and a special summit be called in time for British Prime Minister Boris Johnson to fulfil his pledge to take Britain out of the EU on October 31.

"No longer do markets feel that a no-deal Brexit is Johnson's Primary target, with his willingness to negotiate bringing about tentative optimism that the UK will leave in an orderly manner when the time comes," noted IG analyst Joshua Mahoney.

- Hong Kong in focus - Hong Kong's stock market climbed after the city's leader Carrie Lam was forced to abandon a State of the Union-style policy speech owing to heckling by opposition lawmakers.

Shanghai ended lower with investors moving cautiously as China said it would take "strong measures" after the US House of Representatives passed a bill sought by pro-democracy protesters in Hong Kong that aims to defend civil rights in the city.

If approved by the Senate, the law would end the Hong Kong-US special trading status unless the State Department certifies annually that city authorities are respecting human rights and the rule of law.