Sep 04, 2019: The pound edged up Wednesday to extend the previous day's rebound with Britain looking set for a snap general election, while investors brushed off Donald Trump's latest China outburst to help push Asian equities higher.
After a day of high drama in Westminster, lawmakers voted to take control of parliamentary business that will allow them to push through a bill preventing a no-deal Brexit.
The move was a slap in the face for new Prime Minister Boris Johnson, with several members of his own Conservative party voting against him and defying a warning of an election in mid-October.
Sterling at one point plunged to $1.1959 on Tuesday — its weakest level since 1985 except for a 2016 “flash crash” — but rebounded as traders bet Johnson's loss would take a no-deal divorce off the table. Most economists say such a scenario would hammer the British economy.
Still, the development means a continued period of uncertainty for the country.
Wednesday's “session of parliament promises more viewing pleasure, with the possibility that the UK will be heading to the polls… one of the many possible permutations. This story is one that will just keep on giving as the week progresses”, said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA.
Most Asian equity markets rose after two days of stuttering, with Trump's fresh warnings to Beijing over the trade stand-off having little impact.
The president threatened China that if it did not move quicker in negotiations it would get a worse trade deal from him if he won the next election in 2020.
“While I am sure they would love to be dealing with a new administration… 16 months PLUS is a long time to be hemorrhaging jobs and companies,” Trump said in a tweet.