Pound slips as hard Brexit fears persist, US stocks gain

Sterling slides broadly to its lowest in nearly a month as fears remain over hard Brexit

The pound has slid to its lowest in nearly a month , amid concern the UK Government will take a hard line over Brexit, while US shares nudged at new record highs.

Sterling had hit multi-month highs against other major currencies after Conservative Prime Minister Boris Johnson secured a comfortable majority in the December 12 general election, which many hoped would put an end to a lot of the political paralysis that has stalled the UK’s departure from the European Union.

However, given Johnson’s commitment to his campaign promise to “get Brexit done”, many in the markets are now concerned that this might ultimately result in a less orderly departure from the bloc.

“Sentiment remains weak as fears about a hard Brexit at the end of 2020 rise, keeping the near-term focus at the downside,” said Windsor Brokers analyst Slobodan Drvenica.

Against the dollar, the pound was down by 0.6 per cent at $1.2927, a three-week low, while against the euro it fell 0.7 per cent to 85.79 pence, its weakest since the last week of November.

The euro, meanwhile, was a touch higher on the day at $1.109, while the Japanese yen was flat against the dollar at 109.36 yen.

US President Donald Trump’s assertion at the weekend that trade talks with China were progressing supported US stock markets, but only modestly.

In New York, the S&P 500 rose by 0.1 per cent on the day to 3,224.83 points in early trading, having hit a new record at the start of trading.

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“As we come towards the end of 2019, it seems that there is a positive bias to the macro picture that has been dominating market sentiment throughout the year,” said Richard Perry, an analyst at Hantec Markets.

“Donald Trump supposedly had a 'very good talk' with President Xi of China and that a formal signing of a trade deal (phase one) would be signed 'very shortly'. Perhaps in a sign of fatigue, markets have reacted with a shrug of the shoulders,” he said.

In London, the FTSE 100 was last up 0.54 per cent at 7,623.59, having hit a five-month high earlier in the day and remained on course for an eighth successive day of gains.

On the commodities markets, gold rose 0.5 per cent on the day to $1,488 an ounce. Gold is set for a gain of 1.6 per cent in December. But it was silver that took the spotlight among the precious metals, rising 1.6 per cent to $17.49 an ounce, on course for a fifth consecutive day of gains and a six-week high.

The more industrial commodities pared earlier losses, with Brent crude edging up 0.3 per cent to $66.36 a barrel, having spent most of the day in the red, while US gasoline futures were down just 0.1 per cent at $1.704 a gallon. Copper futures were little changed on the day at around $6,176 a tonne on the London Metal Exchange.

Among the cryptocurrencies, Bitcoin was last up nearly 3.6 per cent on the day at $7,509, while Ethereum shed earlier gains and fell 0.25 per cent to $129.87 and Litecoin gained 0.2 per cent to trade at $41.34.

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