London: The pound retreated Thursday awaiting yet another Brexit vote, after the UK currency struck multi-month highs versus the dollar and euro thanks to British MPs ruling out a no-deal departure from the European Union.
London’s benchmark FTSE 100 index climbed in late morning deals, boosted by the pound’s retreat helping to lift share prices of multinationals.
“The pound has pulled away from its multi-month highs against the dollar and euro reached yesterday after the UK parliament voted against leaving the EU without a deal,” noted Dean Popplewell, analyst at Oanda trading group.
Attention nows turns to Thursday’s vote by British MPs on whether to ask the EU to approve a Brexit delay.
It comes amid plans by Prime Minister Theresa May to ask lawmakers again to back her twice-defeated divorce deal next week.
Following Wednesday’s no-deal vote, the pound surged to $1.3381, its highest level since June.
The euro was meanwhile pushed down to 84.73 pence — a level not seen since May 2017.
In Thursday trading, the pound fell back to $1.3232, while one euro was worth 85.45 pence.
Market focus was also on China, with Shanghai’s stock market closing down 1.2 percent after figures showed the country’s factory output grew slower than forecast in the first two months of the year.
Chinese retail sales and investment were broadly in line with expectations.
The tepid readings highlighted weakness in the world’s number two economy and reinforced the need for measures by the Chinese government to kickstart growth as the global economy stutters and the US trade war drags on.
The “data means the economy will take a longer time to bottom out as industrial production and consumption are still under pressure despite the rebound in investment”, Liu Peiqian, Asia strategist at Natwest Markets PLC, told Bloomberg News.
Traders will be keeping a close eye on closing remarks at the annual National People’s Congress on Friday for an idea about leaders’ plans.
Wall Street had closed higher Wednesday after data showed a pick-up in the US manufacturing sector, while a soft reading on wholesale inflation reinforced expectations the Federal Reserve will not hike interest rates any time soon.
With few major catalysts for buying dealers are awaiting fresh developments in the China-US trade talks with President Donald Trump saying he saw a “very good chance” of a deal but added he was in “no rush”.—AFP