Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar finds footing after stocks slide, Brexit fears hammer pound

ForexSep 10, 2020 08:55PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Illustration photo of British Pound Sterling and U.S. Dollar notes

By Tom Westbrook

SINGAPORE (Reuters) - The dollar clung to gains on Friday after a rout in stocks sent nervous investors to its safety, while sterling was poised for its worst week since March as British plans to break a divorce treaty with Europe rekindled the spectre of a no-deal Brexit.

In a volatile session overnight the pound languished while other majors whipsawed in tandem with moves in the euro and the U.S stock market.

The common currency <EUR=EBS at first zoomed 1% to $1.1917 after European Central Bank President Christine Lagarde insisted the bank does not target the exchange rate.

But her subsequent remark that the bank indeed monitors it, and its effect on inflation - together with a tumble in U.S. stocks - brought investors rushing back to dollars and sank the euro back to $1.1825, where it sat in morning trade.

The risk-sensitive Australian dollar tracked the move and was up as far as $0.7325 before retreating to $0.7263 early in the Asian session. The New Zealand dollar fell to $0.6648 and was under gentle pressure on Friday.

Both could fall a little further during the day, Westpac analysts said, as the mood remains fragile and equities are likely to take the lead with little on the data tap in Asia.

Asia's stock markets opened lower and U.S. futures (ESc1) (NQc1) pulled back to just above flat. [MKTS/GLOB]

The safe-haven Japanese yen held steady at 106.12 per dollar, having inched higher overnight. Against a basket of currencies the dollar (=USD) hung on to modest gains and looks set to finish a second consecutive week ahead.

The main laggard has been the pound . It tested an overnight low of $1.2773 early in the Asia session and has lost 3.6% on the dollar this week and about as much against the euro (EURGBP=) as Brexit turmoil resurfaced.

The European Union told Britain on Thursday it should urgently scrap a plan to break their divorce treaty. But Britain has refused to budge and pressed ahead with a draft law that could sink four years of Brexit talks.

EU diplomats and officials said the bloc could take legal action against Britain, though that would not resolve anything before the end-of-year deadline for Britain's full exit, which is looking increasingly messy.

"The high risk of no trade deal between the UK and EU is a major drag for the pound against most major currencies," said Commonwealth Bank of Australia (OTC:CMWAY) currency analyst Kim Mundy.

Investors are looking to a slew of ECB speakers later today for further guidance on the bank's outlook, as well as British GDP data and U.S. inflation for further clues to the progress of the global recovery from coronavirus lockdowns.

Dollar finds footing after stocks slide, Brexit fears hammer pound
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email