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Pound bobs around May resignation, stocks mostly gain

LONDON, (AFP): The British pound bounced around Friday after Prime Minister Theresa May announced her resignation, while global stocks mostly recovered following a rout in the prior session on US-China trade tensions.

Sterling sank below $1.27 after May said she would step down as prime minister on June 7, paving the way for a contest to replace her. But the British currency later recovered and advanced against the dollar and euro.

“The pound will bounce around here and there but it won’t be going anywhere fast,” Forex.com analyst Fawad Razaqzada told AFP.

“A lot now depends who will be the next leader of the Tories.”

The currency could face fresh turmoil, with key Brexiteer and former foreign minister Boris Johnson the front-runner to replace May.

Ratings agency Moody’s warned that news of May’s departure “amplifies the uncertainty” over Britain’s withdrawal from the European Union, and “increases the risk of a no-deal Brexit.”

Elsewhere, Europe’s major share markets rebounded after the previous day’s sharp-selloff sparked by the China-US trade war and global economic worries.

US stocks also nudged higher, although the gains were not enough to offset losses earlier in the week.

The Dow retreated for the fifth straight week, its longest losing streak since 2011.

After a strong run for the stocks in the first four months of the year, fresh trade war anxiety has roiled markets throughout May as the United States and China have announced new tariff measures amid sharpening rhetoric.

The two sides still have not scheduled another round of negotiations, although both sides have vowed to keep talking.

“The lack of a trade agreement is probably the biggest thing confronting the market going forward,” said Bill Lynch, director of investment at Hinsdale Associates. “Hopefully we’ll get something soon.”

In other disappointing news, data showed sales of US-manufactured goods in April fell to their lowest level in nine months, as American companies sold fewer cars and planes and less factory equipment.

– Key figures around 2040 GMT –

New York – Dow: UP 0.4 percent at 25,585.69 (close)

New York – S&P 500: UP 0.1 percent at 2,826.06 (close)

New York – Nasdaq: UP 0.1 percent at 7,637.01 (close)

London – FTSE 100: UP 0.7 percent at 7,277.73 (close)

Frankfurt – DAX 30: UP 0.5 percent at 12,011.04 (close)

Paris – CAC 40: UP 0.7 percent at 5,316.51 (close)

EURO STOXX 50: UP 0.7 percent at 3,350.70 (close)

Tokyo – Nikkei 225: DOWN 0.2 percent at 21,117.22 (close)

Hong Kong – Hang Seng: UP 0.3 percent at 27,353.93 (close)

Shanghai – Composite: FLAT at 2,852.99 (close)

Pound/dollar: UP at $1.2710 from $1.2657 at 2100 GMT

Euro/pound: DOWN at 88.16 pence from 88.34 pence

Euro/dollar: UP at $1.1205 from $1.1181

Dollar/yen: DOWN at 109.29 yen from 109.61 yen

Oil – Brent Crude: UP 93 cents at $68.69 per barrel

Oil – West Texas Intermediate: UP 72 cents at $58.63 per barrel

(The pound’s fate now hinges on who comes next. Photo: AFP-Daniel LEAL-OLIVAS)

Published Date: Friday, May 24th, 2019 | 06:51 PM

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