Pound Steadies As Johnson Prepares Brexit Bill Battle

Sterling steadied around $1.29 Friday as dealers took a breather at the end of a dizzying week and on the eve of a crucial vote on UK Prime Minister Boris Johnson's Brexit deal

London, (APP - UrduPoint / Pakistan Point News - 18th Oct, 2019 ):Sterling steadied around $1.29 Friday as dealers took a breather at the end of a dizzying week and on the eve of a crucial vote on UK Prime Minister Boris Johnson's Brexit deal.

The stage was set for the House of Commons, which is to meet for the first time on a Saturday in 37 years for a knife-edge vote.

The spotlight in Europe then turns towards Sunday evening, when markets in Asia will deliver their initial verdict on the outcome -- and the potential for a chaotic Brexit on October 31.

Johnson has vowed Britain will exit the bloc that day come what may.

Apparent progress towards talks more than three years after a contentious referendum which split Britain down the middle failed to lift the London stock market.

- Not that exciting - "Friday didn't end up being the most exciting of sessions, coming at the end of a topsy-turvy week and ahead of a potentially historic weekend," said Connor Campbell of Spreadex -- who observed the pound "largely held its nerve." IMF head Kristalina Georgieva urged caution while welcoming signs that Britain may reach a deal to exit the European Union.

"When there is a will, there is a deal... and my hope is that the will holds in all quarters," Georgieva told reporters at the start of the International Monetary Fund annual meeting.

"The market (is) really gambling on tomorrow's vote and has not priced in fully all scenarios -- so expect big moves," warned ETX Capital analyst Michael Baker.

"On Sunday night, the markets will start opening from the Far East ... and it could be a hugely volatile open, regardless of the outcome," he warned.

Dave Ramsden, the Bank of England's policymaker overseeing markets and banking, told Bloomberg that its foreign exchange desk would be staffed overnight Sunday/Monday to ensure smooth trading.

- Rollercoaster trade - In rollercoaster deals, the pound had rallied Thursday to almost $1.

30 on news that negotiators had hammered out an agreement that would avoid Britain leaving the EU without a divorce deal -- a move many commentators warn could be economically catastrophic.

However, sterling then dipped under $1.29 as it became evident that Johnson faced an uphill task in getting the deal past lawmakers, with opposition MPs and some in his own Conservative party saying they were against it.

Most importantly, Northern Ireland's Democratic Unionist Party (DUP), which props up Johnson's government, said it was "unable" to back him.

Britain voted in June 2016 to leave the European Union but it has delayed its departure date twice so far this year after lawmakers rejected previous Brexit deals.

"Based on everything that has happened over the last three years, it is hard to think that it will pass and then Brexit is on the road to completion," Baker remarked.

- Renault sounds alarm - In non-Brexit news, Europe's car sector hit the skids after French auto giant Renault released a gloomy sales outlook.

Renault shares ended 11.48 percent down in Paris after warning that 2019 revenues would be three to four percent lower than last year -- and blamed "less favourable than anticipated" conditions.

"Renault shares slumped today after the company lowered its full-year revenue plus profit guidance," said CMC Markets analyst David Madden.

- Sharp Chinese slowdown - Wall Street stocks dipped in early trading as solid earnings from Coca-Cola and American Express were offset by a weak Chinese economic report and uncertainty over Brexit.

China reported growth of just 6.0 percent in the third quarter, its slowest rate in nearly three decades, due in part to a lengthy trade war with the United States.

The Shanghai market closed off 1.3 percent while Hong Kong dipped 0.5 percent amid concern over the possibility of more violent protests over the weekend.