Sterling tumbles as Boris and Barnier trade early blows
Coronavirus and another Brexit cliff edge dominated investor sentiment on Monday
While coronavirus continued to infect markets across Asia, UK sterling was laid low by an all-too-familiar foe.
Brexit trade-deal uncertainties hit the pound hard on Monday, February 3, as UK prime minister Boris Johnson and EU Brexit negotiator Michel Barnier traded early blows across the English Channel.
Johnson made a speech insisting the UK had no need to align with EU rules. Barnier unveiled a document suggesting it did, at least if it wanted easy access to the bloc’s 450 million consumers.
Sterling took the renewed sense of approaching cliff edge badly, falling 1.01 per cent against the euro and 1.42 per cent against the dollar by 3.30pm GMT.
If sterling was having a bad day, at least it wasn’t oil. The coronavirus crisis has sparked fears of a slowdown in oil consumption in 2020. OPEC is reportedly due to meet on Tuesday and Wednesday to consider cutting production by a million barrels a day.
Brent Crude was trading at $55.93 a barrel on Monday afternoon, down 1.22 per cent on the day and more than 13 per cent since the start of the year. West Texas Intermediate cut a similarly forlorn figure, down more than 15 per cent in the same period. GOld was broadly flat, down 0.67 per cent at $1578
Where stock markets are concerned, Chinese indices were predictably the worst hit by coronavirus fears. Shanghai’s SSEC was down nearly 230 points, or 7.72 per cent, by the close of trading.
European and US indices were more resilient, with London’s FTSE 100 up 0.55 per cent and the German DAX up 0.49 per cent on the day. The Dow Jones was up 1.14 per cent at 11am EST, albeit from a low base.
Last week was the worst in four months for major US indices as jittery investors weighed the potential damage to global growth from the coronavirus outbreak.
Bitcoin continues to be a safe haven of choice for many investors as they ride out the coronavirus storm. While down slightly on the day, the buoyant cryptocurrency was still trading at nearly $9,300 at 4pm GMT.
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