This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/live/2016/oct/12/sterling-rebounds-brexit-fears-bank-of-england-business-live
The article has changed 22 times. There is an RSS feed of changes available.
| Version 16 | Version 17 |
|---|---|
| Pound falls back as Davis says government cannot outline Brexit aims in detail – Business live | Pound falls back as Davis says government cannot outline Brexit aims in detail – Business live |
| (35 minutes later) | |
| 6.17pm BST | |
| 18:17 | |
| Wall Street bank Goldman Sachs has created a stir, by predicting that sterling could shed another 7%. | |
| Goldman Sachs sees further downside risk for sterling. Could fall another 7% from current level, which would take it down to $1.14. | |
| The pound has already dropped by around 17% since the EU referendum; Goldman points out that 25% slumps aren’t terribly uncommon.... | |
| Goldman: in the last century there have been 8 (!!!) periods in which sterling has dropped by more than 25% in less than 12 months. pic.twitter.com/3jX7wLau3i | |
| 5.48pm BST | 5.48pm BST |
| 17:48 | 17:48 |
| A reminder, the UK parliament debate on Brexit is being covered in our politics live blog here: | A reminder, the UK parliament debate on Brexit is being covered in our politics live blog here: |
| Meanwhile the pound has edged up a little, and is now 0.9% better at $1.2228. | Meanwhile the pound has edged up a little, and is now 0.9% better at $1.2228. |
| 5.17pm BST | 5.17pm BST |
| 17:17 | 17:17 |
| European markets close lower | European markets close lower |
| Ahead of the minutes from the latest US Federal Reserve meeting, and as the pound recovers slightly but remains close to its record lows, European markets have ended the day lower. Chris Beauchamp, chief market analyst at IG, said: | Ahead of the minutes from the latest US Federal Reserve meeting, and as the pound recovers slightly but remains close to its record lows, European markets have ended the day lower. Chris Beauchamp, chief market analyst at IG, said: |
| A small recovery in US markets at the beginning of the session is already beginning to fizzle out, while the US dollar is doing well ahead of Fed minutes, on the expectation that the account of the most recent meeting will show a committee still keen to raise rates. As has been the case for the week thus far, attention has focused mainly on sterling, thanks to the absence of heavy-hitting UK data. The pound continues to lose ground, testing the water below $1.22 again, although indications that the UK government may have to navigate Parliament before activating Article 50 have helped to stem downside in cable today. | A small recovery in US markets at the beginning of the session is already beginning to fizzle out, while the US dollar is doing well ahead of Fed minutes, on the expectation that the account of the most recent meeting will show a committee still keen to raise rates. As has been the case for the week thus far, attention has focused mainly on sterling, thanks to the absence of heavy-hitting UK data. The pound continues to lose ground, testing the water below $1.22 again, although indications that the UK government may have to navigate Parliament before activating Article 50 have helped to stem downside in cable today. |
| In a quiet session the main event, Fed minutes, is still to come, and could yet reverse the weakness in equities and the relatively sparky performance of the dollar. Of particular note this afternoon is a possible breakout in dollar/yen which is finally trying to move meaningfully above Y104. 2016 has been, by and large, a year of yen strength, but it will be music to Shinzo Abe’s ears if the Japanese currency finally begins to fall. After all, if the UK can do it, why not Japan? | In a quiet session the main event, Fed minutes, is still to come, and could yet reverse the weakness in equities and the relatively sparky performance of the dollar. Of particular note this afternoon is a possible breakout in dollar/yen which is finally trying to move meaningfully above Y104. 2016 has been, by and large, a year of yen strength, but it will be music to Shinzo Abe’s ears if the Japanese currency finally begins to fall. After all, if the UK can do it, why not Japan? |
| On the European markets, the final scores showed: | On the European markets, the final scores showed: |
| On Wall Street, the Dow Jones Industrial Average is currently up 31 points or l0.18%. | On Wall Street, the Dow Jones Industrial Average is currently up 31 points or l0.18%. |
| 4.33pm BST | 4.33pm BST |
| 16:33 | 16:33 |
| Here’s our story on the debate in parliament, with MPs warning the government that the current uncertainty is hitting businesses and markets. Rowena Mason reports: | Here’s our story on the debate in parliament, with MPs warning the government that the current uncertainty is hitting businesses and markets. Rowena Mason reports: |
| A string of Tory and Labour MPs have warned David Davis, the Brexit secretary, that businesses and financial markets are being spooked by his lack of a plan for leaving the EU. | A string of Tory and Labour MPs have warned David Davis, the Brexit secretary, that businesses and financial markets are being spooked by his lack of a plan for leaving the EU. |
| Claire Perry, a Conservative former minister, said on Wednesday she was extremely concerned about the state of the pound and accused him of putting “narrow ideology” ahead of the national interest, while Ken Clarke, the former chancellor, said no foreign companies would invest until there was more clarity about the UK’s future relationship with the outside world. | Claire Perry, a Conservative former minister, said on Wednesday she was extremely concerned about the state of the pound and accused him of putting “narrow ideology” ahead of the national interest, while Ken Clarke, the former chancellor, said no foreign companies would invest until there was more clarity about the UK’s future relationship with the outside world. |
| Chris Philp, a Tory backbencher, urged the Brexit secretary to give away more details, saying there was a “danger some [businesses] may take decisions in the next two or three months” to pre-emptively scale back investment and move jobs. | Chris Philp, a Tory backbencher, urged the Brexit secretary to give away more details, saying there was a “danger some [businesses] may take decisions in the next two or three months” to pre-emptively scale back investment and move jobs. |
| Others to raise concerns included the serial rebel Anna Soubry, a former business minister who attended cabinet, who demanded a yes or no answer as to whether the UK would be in the single market. | Others to raise concerns included the serial rebel Anna Soubry, a former business minister who attended cabinet, who demanded a yes or no answer as to whether the UK would be in the single market. |
| The Brexit secretary said it was “not black or white” whether the UK would stay in the single market and parliament could not expect to be given every detail of the government’s plans for leaving. | The Brexit secretary said it was “not black or white” whether the UK would stay in the single market and parliament could not expect to be given every detail of the government’s plans for leaving. |
| Davis said the government had a mandate to get the best possible deal but insisted he could go no further than talking about overarching aims because revealing the UK’s top priority would prove “extremely expensive”. | Davis said the government had a mandate to get the best possible deal but insisted he could go no further than talking about overarching aims because revealing the UK’s top priority would prove “extremely expensive”. |
| The full story is here: | The full story is here: |
| 4.30pm BST | 4.30pm BST |
| 16:30 | 16:30 |
| The pound is back below $1.22 as the lift from the government’s promise of a Brexit debate fades, and the US currency strengthens on the growing expectation of a rate rise from the Federal Reserve before the end of the year. | The pound is back below $1.22 as the lift from the government’s promise of a Brexit debate fades, and the US currency strengthens on the growing expectation of a rate rise from the Federal Reserve before the end of the year. |
| Sterling is currently at $1.2193, up 0.6% on the day having earlier climbed as high as $1.2325. Against the euro the pound is up 1% at €1.1075. | Sterling is currently at $1.2193, up 0.6% on the day having earlier climbed as high as $1.2325. Against the euro the pound is up 1% at €1.1075. |
| 4.00pm BST | 4.00pm BST |
| 16:00 | 16:00 |
| A Treasury official has sought to ease fears about the City’s future in a post-Brexit world. Reuters reports: | A Treasury official has sought to ease fears about the City’s future in a post-Brexit world. Reuters reports: |
| Britain’s financial services sector will be a “high priority” for the government when it negotiates the terms of Britain’s new relationship with the European Union, the most senior official in the country’s finance ministry said. | Britain’s financial services sector will be a “high priority” for the government when it negotiates the terms of Britain’s new relationship with the European Union, the most senior official in the country’s finance ministry said. |
| “The UK economy and UK exports are quite services-heavy, and financial services are an important part of that. So I think we will be very keen indeed to make sure the final agreement gives the proper place to financial services within that,” Tom Scholar, permanent secretary at the Treasury said. | “The UK economy and UK exports are quite services-heavy, and financial services are an important part of that. So I think we will be very keen indeed to make sure the final agreement gives the proper place to financial services within that,” Tom Scholar, permanent secretary at the Treasury said. |
| “So it will have a high priority in our discussions,” he said in a hearing before the lower house of parliament’s Treasury Committee on Wednesday. | “So it will have a high priority in our discussions,” he said in a hearing before the lower house of parliament’s Treasury Committee on Wednesday. |
| Top bankers warned on Tuesday they could start moving staff abroad as early as next year if there is no clarity on Britain’s access to the European single market once it leaves the EU. | Top bankers warned on Tuesday they could start moving staff abroad as early as next year if there is no clarity on Britain’s access to the European single market once it leaves the EU. |
| 3.29pm BST | 3.29pm BST |
| 15:29 | 15:29 |
| On the pound’s moves today, Connor Campbell at Spreadex said: | On the pound’s moves today, Connor Campbell at Spreadex said: |
| Though not as perky as at lunch time the pound has nevertheless held onto its earlier gains this afternoon. | Though not as perky as at lunch time the pound has nevertheless held onto its earlier gains this afternoon. |
| In the face of US investors keen to buy the dollar as Donald Trump’s presidential campaign disintegrates, and a speech from Brexit minister David Davis that erred on the ‘hard’ side of things, the pound managed to rise 0.7% against the greenback and 0.8% against the euro this Wednesday. A slight comedown from its morning highs, then, but nevertheless the kind of respite sterling was crying out for by the end of yesterday’s trading. | In the face of US investors keen to buy the dollar as Donald Trump’s presidential campaign disintegrates, and a speech from Brexit minister David Davis that erred on the ‘hard’ side of things, the pound managed to rise 0.7% against the greenback and 0.8% against the euro this Wednesday. A slight comedown from its morning highs, then, but nevertheless the kind of respite sterling was crying out for by the end of yesterday’s trading. |
| 3.27pm BST | 3.27pm BST |
| 15:27 | 15:27 |
| Of course Brexit is not the only thing influencing currencies at the moment, the dollar in particular. The greenback is strengthening on the prospect of a possible US interest rate rise this year, with Hillary Clinton’s lead in the US presidential race deemed to be something which could allow the Fed to move. | Of course Brexit is not the only thing influencing currencies at the moment, the dollar in particular. The greenback is strengthening on the prospect of a possible US interest rate rise this year, with Hillary Clinton’s lead in the US presidential race deemed to be something which could allow the Fed to move. |
| The minutes from the last Federal Reserve meeting, which left rates unchanged, will therefore be scrutinised for clues as to what the Fed members are thinking. Michael Hewson, chief market analyst at CMC Markets UK, said: | The minutes from the last Federal Reserve meeting, which left rates unchanged, will therefore be scrutinised for clues as to what the Fed members are thinking. Michael Hewson, chief market analyst at CMC Markets UK, said: |
| The US dollar has continued to be the primary beneficiary of this uncertainty hitting its highest levels since March, as markets look to the potential for a rate rise in December ahead of the publication later today of the latest FOMC minutes, where we will get further insight into the level of the dissent about last month’s decision to hold rates steady. | The US dollar has continued to be the primary beneficiary of this uncertainty hitting its highest levels since March, as markets look to the potential for a rate rise in December ahead of the publication later today of the latest FOMC minutes, where we will get further insight into the level of the dissent about last month’s decision to hold rates steady. |
| We know the doves were able to win the argument this time, however we don’t know how wide the divisions were and whether any other members felt compelled to go with the dissenters, but harboured enough doubts to hold back and wait a little bit longer. If the minutes point to any waverers on the dove front then the US dollar could well take another leg higher. | We know the doves were able to win the argument this time, however we don’t know how wide the divisions were and whether any other members felt compelled to go with the dissenters, but harboured enough doubts to hold back and wait a little bit longer. If the minutes point to any waverers on the dove front then the US dollar could well take another leg higher. |
| 2.59pm BST | 2.59pm BST |
| 14:59 | 14:59 |
| Some choice words from ex-chancellor Kenneth Clarke: | Some choice words from ex-chancellor Kenneth Clarke: |
| Clarke: "the reaction in the markets is only too obvious. Pound has devalued to an extent that would have been regarded a crisis in my time" | Clarke: "the reaction in the markets is only too obvious. Pound has devalued to an extent that would have been regarded a crisis in my time" |
| 2.51pm BST | 2.51pm BST |
| 14:51 | 14:51 |
| Time for some charts. | Time for some charts. |
| This one shows how the pound has suffered a volatile few days – starting with Friday’s flash crash, and continuing with last night’s rout. | This one shows how the pound has suffered a volatile few days – starting with Friday’s flash crash, and continuing with last night’s rout. |
| And this one, from fastFT, shows how the pound hit an all-time low against a basket of currencies last night (the data only goes back to mid-1880s). | And this one, from fastFT, shows how the pound hit an all-time low against a basket of currencies last night (the data only goes back to mid-1880s). |
| The FT’s Mehreen Khan says: | The FT’s Mehreen Khan says: |
| According to a trade-weighted index measuring sterling against a basket of its trading peers, the pound has now slumped to its lowest on record, stretching beyond the introduction of free-floating exchange rates in the 1970s, back to the mid-1800s according to data compiled by the Bank of England. | According to a trade-weighted index measuring sterling against a basket of its trading peers, the pound has now slumped to its lowest on record, stretching beyond the introduction of free-floating exchange rates in the 1970s, back to the mid-1800s according to data compiled by the Bank of England. |
| The pound’s effective exchange rate, which is weighted to reflect the UK’s trade flows, hit a low of 73.38 on Tuesday – weaker than the depths hit during the financial crisis, Britain’s ejection from the European Rate Mechanism in 1992, and its decision to leave the Gold Standard in the 1930s. | The pound’s effective exchange rate, which is weighted to reflect the UK’s trade flows, hit a low of 73.38 on Tuesday – weaker than the depths hit during the financial crisis, Britain’s ejection from the European Rate Mechanism in 1992, and its decision to leave the Gold Standard in the 1930s. |
| 2.37pm BST | 2.37pm BST |
| 14:37 | 14:37 |
| Brexit Minister David Davis talks and pound falls, again. Sterling now below $1.22 v USD | Brexit Minister David Davis talks and pound falls, again. Sterling now below $1.22 v USD |