Pound Lower on UK Turmoil
There are a lot of unknowns in the United Kingdom these days, but two things are certain: David Davis and Boris Johnson, two key players from Prime Minister Theresa May’s government, have opted out. The resignations have raised concerns about a “hard Brexit” and have sent the pound broadly lower. The British currency was down 0.07 percent against the dollar as of 10:22 a.m. HK/SIN on Tuesday, to trade at $1.3248. The pound was also lower against the euro, trading at 0.8866.
Johnson resigned on Monday as a protest against May’s plans to keep close trade ties with the European Union even after the UK leaves the union. His resignation came only a few short hours after David Davis, the Brexit Secretary, resigned. As reported by the BBC, Davis felt that he was no longer the best person to deliver May’s Brexit plan. May did not agree with Davis, but she accepted his resignation and thanked him for his service.
Stock Market Madness
Stock markets extended their rally on Tuesday morning, with most Asian indexes trading higher after another strong day on Wall Street on Monday, buoyed by gains in the banking sector. Traders set aside their concerns about the trade war between the United States and China, focusing instead on the upcoming earnings season and strong jobs report released last Friday. The Dow Jones Industrial Average closed over 1 percent higher on Monday, and the S&P 500 and NASDAQ both closed 0.88 percent higher.
The Shanghai Composite was up 0.42 percent and South Korea’s Kospi was up 0.52 percent in the early morning on Tuesday. Japan’s Nikkei 225 and Hong Kong’s Hang Send Index were up 1.01 percent and 0.77 percent respectively.