Pound regains ground as Brexit storm rages

NEW YORK — The pound rebounded against the dollar on Friday, a day after a severe shellacking, as some investors were willing to bet on British Prime Minister Theresa May getting a controversial Brexit draft deal through parliament, dealers said.

Even as dark clouds continued to gather over the prime minister’s political future, many felt she might just get enough support for what she called “the best deal for Britain”, they said.

“The pound is holding on to its early Friday morning gains, on the back of UK PM May’s radio interview in which she said her deal was the best Brexit compromise the UK could achieve”, said Dean Popplewell, an analyst at Oanda.

In the late European afternoon, the pound was up around 0.6 per cent against the dollar, off earlier highs, but slightly down against the euro.

The British currency slumped 1.7 per cent against the dollar on Thursday, the biggest daily drop for more than two years.

But analysts warned that the outlook for the British currency’s trajectory was uncertain.

‘Short-lived’ 

“Stability in the pound... could be short-lived, with clamors for a vote of no confidence from Conservative Brexiteers meaning the political upheaval will continue as we end the week,” said Joshua Mahony, market analyst at IG trading group.

Meanwhile in European stock markets, Brexit fears kept prices down, with banking shares particularly under pressure “over concerns of a disorderly UK exit from the European Union”, said analysts at Charles Schwab.

Elsewhere, Wall Street eked out a split finish — reversing some earlier losses following hopeful comments on trade from US President Donald Trump — but still finishing the week sharply lower after a string of earlier losses.

Trump gave the major stock indices a bump in early afternoon, announcing that Beijing had made overtures toward resolving the US-China trade war so he might not need to impose yet more tariffs.

In New York, oil prices also ended lower for the sixth straight week but benchmark WTI crude was flat.

Exxon Mobil added 1 per cent while fellow Dow member Chevron grew 1.8 per cent.

“Oil and gas stocks are doing well, because oil prices are off their lows. We seem to have found a floor in that sector,” Chris Low of FTN told AFP.

Asian stock markets earlier swung throughout Friday’s session as investors weighed China-US trade speculation.

Trump said China offered a list of trade concessions as part of a move to smooth relations ahead of a G-20 summit where he is expected to meet Chinese President Xi Jinping.

The Financial Times said the two sides were stepping up efforts and that US Trade Representative Robert Lighthizer had told business leaders the next round of tariffs would be put on hold. While Lighthizer’s office denied that, observers said the news still provided some hope.