U.K. Pound Posts Gains on Brexit Optimism

Date : 10/15/2019 @ 10:33AM
Source : Dow Jones News
Stock : FTSE 100 Index (UKX)
Quote : 5671.96  108.22 (1.95%) @ 4:45PM

U.K. Pound Posts Gains on Brexit Optimism

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By Anna Isaac 

The British pound ticked higher as investors speculated that the U.K. may reach a deal with the European Union this week.

The currency advanced 0.5% against the U.S. dollar early Tuesday, while the equity benchmark FTSE 100 index remained mostly flat.

The EU's chief Brexit negotiator, Michel Barnier, told reporters early on Tuesday that reaching a deal with the U.K. was still possible following intense talks between the two side. Officials on both sides say gaps between the U.K. and EU have narrowed, but obstacles remain before a deal can be completed.

Meanwhile, U.S. stock futures and equities across Europe posted gains as investors continued to try to assess the probability of the U.S. and China ending the trade war after both sides said last week that they'd made progress toward a partial deal. The Stoxx Europe 600 gauge rose 0.4%, while futures tied to the Dow Jones Industrial Average also gained 0.4%.

"Markets are fairly muted because this should actually be viewed as a cease fire rather than a deal," said Edward Park, deputy chief investment officer at Brooks Macdonald Asset Management. The only major progress was that the U.S. shelved additional tariffs that had been scheduled to go into place this week, he said.

Over in Asia, Chinese stocks fell as fresh economic data added to concerns about weaker growth prospects and the government's ability to strike a trade agreement with the U.S.

The Shanghai Composite gauge dropped 0.6% as official data showed inflation reached a six-year high last month, driven by rising pork prices. This comes amid signs of slowing growth and trade tensions for the world's second-largest economy.

Shares in fintech firm Wirecard fell about 18% in Germany following a report in the Financial Times about its accounting practices. Internal documents from the payments company point to a concerted effort to fraudulently inflate sales and profits, the newspaper said. Representatives for Wirecard declined to immediately comment.

The Turkish Lira climbed 0.2% against the dollar, reflecting investors' relief that President Trump had opted to impose "relatively mild" sanctions on the country, analysts at Rabobank's research unit said in a note to clients.

Later in the day, investors will be watching closely as a host of major financial firms, including BlackRock, the world's largest asset manager, and banks such as JPMorgan Chase, Goldman Sachs Group and Citigroup will report earnings.

Write to Anna Isaac at anna.isaac@wsj.com


(END) Dow Jones Newswires

October 15, 2019 05:18 ET (09:18 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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