Monday 23 July 2018

Pound trades in the red as lack of Brexit progress disappoints

Investors had been holding out hope for quick progress in Brexit talks.

Brexit
Brexit

By Kalyeena Makortoff, Press Association City Reporter

The pound was trading in the red on Friday despite strong manufacturing data, as a lack of news around Brexit talks resulted in subdued interest in the UK currency.

Sterling was down around 0.2% against the US dollar at 1.349 and fell 0.2% against the euro to trade near 1.133.

The FTSE 100 also ended the day in the red, dropping 0.36% or 26.18 points to 7,300.49 points.

“This fall came despite a four-year-high manufacturing PMI in November, with the pound seemingly struggling to completely justify its recent highs without another Brexit breakthrough titbit to sate investors,” Connor Campbell, a financial analyst at Spreadex, said.

Investors had been holding out hope for quick progress in Brexit talks amid reports that the UK had tabled a larger EU  divorce bill and put together proposals that would avoid a hard border with the Republic of Ireland earlier this week.

Even strong manufacturing figures did not lift the pound.

The closely watched IHS Markit/CIPS UK Manufacturing purchasing managers’ index (PMI) came in at 58.2 for November, marking its strongest reading since August 2013.

It was up from 56.6 in October and exceeded economist expectations of 56.5.

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Manufacturing activity

Production gathered pace thanks to a raft of new orders that companies attributed to “solid domestic demand” and export business driven by higher sales to clients in Europe, the Americas, Asia and the Middle East.

Across Europe, the French Cac 40 and German Dax took a hit, falling around 1% and 1.2%, respectively.

In oil markets, Brent crude prices shot up more than 2.2% to $64.04 per barrel – their highest level since early June 2015 – after Opec members and a host of other major producers including Russia agreed to extend an oil cap through to the end of 2018.

The move is expected to help raise languishing oil prices, which have dropped amid a supply glut and weaker demand.

In UK stocks, RBS fell 6.5p to 270.1p as the state-backed lender said it would close 259 branches and let go around 680 staff, saying more people were choosing to bank online or on mobile.

It comes a week after the Government said it was preparing to re-privatise the lender by offloading around two thirds of its stake, bought at the height of the financial crisis.

Away from the top tier, Thomas Cook rose 0.7p to 119.2p as the travel giant confirmed plans to shutter 50 high street shops by March 2018, amid a rise in online travel bookings.

Thomas Cook said that the affected stores are either in close proximity to other outlets or located where a decline in footfall has impacted profitability.

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Thomas Cook pilots industrial action

Indivior jumped 11.2p to 382p after the US Food and Drug Administration (FDA) approved the firm’s opioid addiction treatment.

The company says Sublocade is the first and only monthly injection formula that can help treat moderate to severe addictions to drugs including heroin.

The biggest risers on the FTSE 100 were Convatec Group up 5.5p to 199.5p, British American Tobacco up 95.5p to 4,784.5p, Anglo American up 25p to 1,384p, and Randgold Resources up 110p to 6,885p.

The biggest fallers on the FTSE 100 were Associated British Foods down 78p to 2,870p, Severn Trent down 53p to 2,046p, Prudential down 44p to 1,815p, and Royal Bank of Scotland down 6.5p to 270.1p.

Press Association

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