Finance Finance News Australian dollar surges against pound amid Brexit turmoil, Wall Street rebounds on Apple, trade

Australian dollar surges against pound amid Brexit turmoil, Wall Street rebounds on Apple, trade

The Australian dollar rose 2.4 per cent against a falling pound. Photo: Pubic Domain Pictures/CC
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Britain’s currency has plummeted against the Australian dollar, among other currencies, amid the ongoing Brexit turmoil.

The Australian dollar was buying almost 57 British pence – its highest level in almost three months, after a 2.4 per cent surge against the tumbling Sterling.

Markets at 8:30am (AEDT):

  • ASX SPI 200 +0.2pc at 5761, ASX 200 (Thursday’s close) flat at 5,736
  • AUD: 72.75 US cents, 56.92 British pence, 64.21 Euro cents, 82.67 Japanese yen, $NZ1.07
  • US: Dow Jones +0.8 at 25,289, S&P 500 +1.1pc at 2,730, Nasdaq +1.7pc at 7,529
  • Europe: FTSE +0.1pc at 7038, DAX -0.5pc at 11,354, CAC -0.7pc at 5,034, Euro Stoxx 50 -0.5pc at 3,190
  • Commodities: Brent crude +0.8pc at $US66.66/barrel, spot gold +0.2pc at $US1,213.17/ounce, iron ore -1.3pc at $US74.93/tonne

The pound has been a volatile currency recently, as it rises on positive headlines like the United Kingdom’s successful negotiation of a draft divorce deal with the European Union.

But then it also fell sharply on negative headlines, with the most recent being the string of ministerial resignations — including Brexit Minister Dominic Raab — and a potential no-confidence motion against UK Prime Minister Theresa May.

The Australian dollar was also stronger against the US dollar (+0.6pc), euro (+0.4pc) and Japanese yen (+0.6pc).

The local currency’s strength was also due to yesterday’s stronger-than-expected job figures — with unemployment at its lowest level in six-and-a-half years (5pc) and 32,800 new jobs being created.

Apple rebounds, amid hopes for US-China deal

Australian shares are likely to head slightly higher, with ASX futures indicating a 0.2 per cent gain in early trade.

It follows a strong, but still volatile, session on Wall Street. It was spurred by a recovery in technology stocks and hopes that China and the United States will resolve their ongoing trade dispute.

After five straight days of losses, Apple shares gained 2.6 per cent, lifting the S&P tech sector.

The benchmark S&P 500 index also snapped its five-day losing streak, finishing 1.1 per cent higher at 2,730.

The tech-heavy Nasdaq jumped 1.7 per cent to 7,259. It was also helped by a recovery in Amazon (+1.3pc) and Google (+1.6pc) stocks.

Meanwhile, the industrial-skewed Dow Jones index rose 209 points, or 0.8 per cent, to 25,289. It was helped by a rebound in financial stocks, including JP Morgan Chase (+2.5pc) and Bank of America (+2.5pc).

All three US indices began trading in negative territory, but were able to ultimately reverse their losses.

The broader market was boosted by a report that US and Chinese negotiators are stepping up their efforts to strike a truce in the trade war — ahead of their presidents Donald Trump and Xi Jinping meeting at the late-November G20 summit in Argentina.

The report from the Financial Times also said that US Trade Representative Robert Lighthizer told a group of industry executives the next tranche of tariffs on Chinese imports has been put on hold.

“We’d be trading sideways for quite a while … but we’ve rallied on that headline,” said Michael O’Rourke, chief market strategist at JonesTrading.

“If we’re stopping imposing tariffs and are talking, it’s a positive.”