Pound wobbles as May resigns | 2019-05-26 | daily-sun.com

Pound wobbles as May resigns

26 May, 2019 12:00 AM printer

LONDON: The British pound wobbled Friday after Prime Minister Theresa May announced her resignation, while stock markets mostly rebounded as US President Donald Trump offered an “olive branch” to China in their trade war, dealers said.

Sterling sank below $1.27 after May said she would step down on June 7 as prime minister, paving the way for a brutal contest to replace her.

The fall was contained, however, as the likelihood of May’s departure had been mostly factored into prices — although the Conservative party’s choice to succeed her remains an unknown, reports AFP.

“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 and US stocks rebounded after the previous day’s sharp-selloff sparked by the China-US trade war and global economic worries.

Wall Street’s Dow index was over 100 points higher shortly after the opening bell, offsetting some of Thursday’s losses.

Sentiment brightened after Trump declared that there is a “good possibility” Washington will reach an agreement with Beijing to end their trade conflict, adding that “it’s possible that Huawei would be included in a trade deal”. Fiona Cincotta, analyst at trading firm City Index, said that equities had won support on “Trump’s trade olive branch” to China.


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