Business World

Saturday 21 April 2018

Pound gains on the back of May speech

A financial graph on a television screen showing the movement of the foreign exchange rate of the British pound against the US dollar in realtime on the trading floor of ETX Capital in London as British Prime Minister Theresa May delivers a speech on Brexit. Photo: AFP/Getty Images
A financial graph on a television screen showing the movement of the foreign exchange rate of the British pound against the US dollar in realtime on the trading floor of ETX Capital in London as British Prime Minister Theresa May delivers a speech on Brexit. Photo: AFP/Getty Images

Sean Duffy

The pound surged on currency markets yesterday after the UK Prime Minister, Theresa May, gave the most detailed account to date of the type of Brexit deal she will be seeking for the country.

Ms May confirmed that Britain would be leaving the single market, but said she would be seeking a deal that would protect the economic interests of both the UK and the EU.

Sterling rose by 2.8pc against the dollar, to trade at $1.2383. The pound was also much stronger against the euro, with gains of 1.9pc taking the currency to €1.1585

Europe's banking index rose 0.8pc, reversing earlier losses and making it the biggest sectoral gainer in Europe. Top gainers were UK's Standard Chartered and Royal Bank of Scotland, both up more than 4pc.

"Banking stocks are also performing (well) after Ms May's declarations relieved fears of an exodus of UK-based banks," said Yann Quelenn, market analyst at Swissquote Bank.

"Single market access is key and abandoning would spell the end for such institutions to provide services across the EU," he said.

Italian banks rose 1.8pc, helped by an upbeat note from Goldman Sachs.

In Dublin, the Iseq overall index was down 0.12pc at 6570.47.

Smurfit Kappa shares rose after the company revealed it was to issue a €500m bond in order to pay down outstanding debt. Kenmare Resources shares were the biggest winners of the day. The mineral exploration stock had gains of 8.1pc.

Earlier this week, Kenmare announced it had paid down a substantial amount of its outstanding debt after enjoying a bumper year of production at its mine in Mozambique.

Additional reporting by Reuters

Irish Independent

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