Economy

Sterling jumps after no-deal Brexit rejected; dollar softer

Sterling jumps after no-deal Brexit rejected; dollar softer”

For most people who know Britain, it is hard to believe that the British Parliament could ask the British people to vote on whether to leave the European Union, then refuse to implement the democratic instruction of the people.

The UK's benchmark FTSE 100 closed flat, FTSEurofirst 300 ended the day up by 0.63 percent, Germany's Dax ended up by 0.5 percent, and France's CAC finished the up by 0.7 percent.

USA stocks advanced broadly with all 11 of the S&P 500's sectors rising, boosted by health care and energy, which also lifted shares in Europe.

The pound rose on expectations lawmakers would reject a no-deal Brexit and gained further after the motion in Parliament paved the way for a new vote to delay departure from the EU.

Economic data still suggests an "OK" economy but analysts' estimates of corporate profits are slowing, which is worrisome, said Michael Geraghty, equity strategist at Cornerstone Capital Group in NY.

"Before we conclude that this market still has decent legs, we'd like to see equity prices supported by stronger macro data, lifted by better earnings trends, and confirmed by stable-to-rising yields", David Lafferty, chief market strategist at Natixis, said in a note titled "Rally vs Reality".

The MSCI All-Country World Index rose 0.6 percent.

On Wall Street, the Dow Jones Industrial Average rose 148.23 points, or 0.58 percent, to 25,702.89. The S&P 500 gained 21.84 points, or 0.78 percent, to 2,813.36 and the Nasdaq Composite added 64.21 points, or 0.85 percent, to 7,655.24.

GBP/USD: Sterling rose sharply higher against dollar on Wednesday, after British lawmakers voted resoundingly against leaving the European Union in 16 days' time without a transition agreement. This is the latest sign of benign inflation, supporting the Federal Reserve's wait-and-see approach to further interest rate hikes this year.The euro was up 0.41 percent at $1.1332.

In late NY trading, the euro was up to 1.1329 USA dollars from 1.1296 dollars in the previous session, and the British pound rose to 1.3217 dollars from 1.3084 dollars in the previous session. The Japanese yen strengthened 0.19 percent versus the greenback at 111.17 per dollar.

In afternoon trading, USA 10-year note yields rose to 2.612 percent from 2.605 percent late on Tuesday.

"After yesterday's CPI (consumer price index) data, yields fell. But the dollar has been weakened by declining USA yields and any reprieve for the currency is likely to be limited".

US crude stocks fell last week as refineries hiked output, the US Energy Information Administration said.

Gold hit almost a two-week high as tepid United States economic data reinforced views the Fed would be patient on monetary policy.

Spot gold gained 0.6 percent to $1,309.30 per ounce as of (2056 GMT), its highest level since March 1.US gold futures settled 0.9 percent higher at $1,309.3 per ounce.

Oil prices extended overnight gains with US crude up 15 cents per barrel at $58.41 and Brent adding 22 cents to $67.77.



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