Nearly one month since the Brexit referendum vote shocked markets across the globe, the British pound has recovered one quarter of its post-referendum price and most major global stock markets, iincluding the FTSE are now higher than before the vote.
The FTSE 100 closed above 6,700 Wednesday for the first time in over 11 months after a Bank of England survey showed “no clear evidence” of a sharp Brexit-induced economic slowdown.
London’s benchmark index made gains of 31.62 points, or 0.47pc, to finish at 6,728.99, its highest close since August 10 last year when it ended the trading session at 6,736.22.
The pound weakened at $1.3065 against the dollar in early trade, down 0.41pc, before swinging into positive territory on the back of a strong UK jobs report and the Bank of England survey. It climbed to an intraday high of $1.3198, up 0.6pc.
According to Chris Beauchamp, of IG, “With the initial shock of Brexit subsiding and the corporate picture improving, fears of a ‘summer swoon’ to rival last year’s look to be fading.”
RBNZ to Cut Interest Rate
Down under, the Reserve Bank of New Zealand says interest rate cuts are likely as inflation continues to track below target. The central bank said the world economy was weakening, the currency needed to be weaker and strong migration was being offset by weak dairy prices. In its most recent economic update, the RBNZ suggested the Reserve Bank would cut the official cash rate (OCR) in August and again in November, to 1.75 per cent. The current 2.25 per cent benchmark interest rate is already an all-time low.