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Sterling languishes at 7-year lows on Brexit risk
Sterling fell 1.8 per cent to a seven-year low against the dollar on Monday, reaching close to $1.3500. The rising odds of the United Kingdom leaving the European Union continue to weigh on the pound. Today the pound was 0.2 per cent weaker at $1.4119.
The euro was 0.1 per cent stronger at $1.1040, while the dollar index – a measure of the US currency versus a basket of global peers – was down 0.2 per cent at 97.235.
The yen was stronger against the dollar and this pushed USD/JPY below 112 yen. Gains for the Japanese currency accelerated as the People’s Bank of China fixed the yuan reference rate 0.17 per cent weaker at 6.5273 per dollar. This was the lowest since January 7.
There was a 5 per cent rally in oil prices yesterday which took oil above $33 a barrel but there was some unwinding of these gains in Asia today. Brent crude, the international benchmark, was down 1.2 per cent at $34.26 a barrel, while WTI crude, the US benchmark, was off 1.2 per cent at $32.98. Both benchmarks rose more than 5 per cent yesterday as the International Energy Agency said in its annual medium-term oil market report it expected the market to begin rebalancing in 2017.
Oil price have been leading the stock markets, and there has been a strong correlation recently between the two. The rally in oil prices led to a strong rally in Wall Street yesterday. Japan’s Nikkei 225 gained as much as 1.5 per cent shortly after the Asian market open before falling. Australia’s S&P/ASX 200 was up as much as 0.7 per cent in early session trading before easing back down.
Gold was 0.6 per cent higher at $1,215.51 an ounce.
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