Sterling sparkles after election poll, yuan up on trade deal reports
By Stanley White TOKYO (Reuters) - The pound rose to a three-and-a-half year high versus the euro and the highest in more than a year versus the dollar after exit polls suggested a win for the Conservatives, which should help ensure the UK's smooth exit from the European Union. The Chinese yuan rose in offshore trade and the Japanese yen fell after a source told Reuters that the United States and China have agreed some tariff reductions and a delay on tariffs set to go effect on Dec.
By Stanley White
TOKYO (Reuters) - The pound rose to a three-and-a-half year high versus the euro and the highest in more than a year versus the dollar after exit polls suggested a win for the Conservatives, which should help ensure the UK's smooth exit from the European Union.
The Chinese yuan rose in offshore trade and the Japanese yen fell after a source told Reuters that the United States and China have agreed some tariff reductions and a delay on tariffs set to go effect on Dec. 15.
The early results suggest the election will relieve almost four years of uncertainty about when Brexit would take place, which should be supportive of the pound.
A successful scaling back of trade tension would relieve one major headwind to economic growth, which suggests lower demand for the safe-haven yen. Avoiding new tariffs should also be a boost to China's slowing economy, which should draw more investors to the yuan.
"We've already seen a strong reaction in the pound from the exit poll," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
"We also see a rise in stock futures in reaction to two very important pieces of news for markets. This should support global growth. The yuan can also go higher, but it depends on how much dollar strength we get."
Against the euro, sterling
The pound plunged more than 10% in the immediate aftermath of Britain's vote to leave the European Union in June 2016, while $2 trillion was wiped off world markets.
The exit poll, which suggested UK Prime Minister Boris Johnson would get a majority of 86 - the largest of any Conservative leader since Margaret Thatcher won in the 1980s - should empower him to deliver Brexit on Jan. 31.
Official results will be declared over the next seven hours.
Even if Brexit is completed on Jan. 31, there is still some uncertainty because Britain will then enter a transition period during which it will negotiate a new relationship with the remaining 27 EU states.
In the offshore market, the Chinese yuan
As part of the trade deal, China has also agreed to purchase $50 billion of U.S. agricultural goods next year, sources familiar with the talks told Reuters.
The yuan rallied and the yen fell late on Thursday after Bloomberg News reported that U.S. President Donald Trump signed off on a trade deal with China that will delay a new round of tariffs scheduled for Dec. 15.
A trade dispute between the United States and China over Chinese trading practices that Washington says are unfair has dragged on for almost two years, making the stand off the biggest risk to the global economy.
Against the dollar, the yen
The dollar index <.DXY> against a basket of six major currencies fell 0.35% to 96.736, approaching the lowest since July this year.
(Reporting by Stanley White; editing by Diane Craft and Stephen Coates)
This story has not been edited by Firstpost staff and is generated by auto-feed.
South Korean woman linked to scandal to be extradited from Denmark - prosecutor | Reuters
COPENHAGEN A South Korean woman wanted for questioning in connection with the scandal that brought down president Park Geun-hye has withdrawn her appeal against extradition from Denmark, the Danish state prosecutor said on Wednesday.
Pope asks Trump to be peacemaker, gives him environmental letter | Reuters
By Philip Pullella and Steve Holland | VATICAN CITY VATICAN CITY Pope Francis urged U.S.
U.S. home sales fall as tight supply boosts prices | Reuters