- Sterling climbs to two-month high
- North Korean missile test fails to stir Asian markets
- Oil slips ahead of OPEC decision
UK assets re-pricing after a Brexit breakthrough, where British Prime Minister has agreed to pay the hefty fine to leave the European Union.
Sterling rallied as investors hope the agreement give May some leverage on issues such as the Irish border and trade. The pound added 0.5% against the dollar, while gaining 0.4% against the euro.
The FTSE 100 felt the brunt of the stronger pound, edging 0.2% lower.
The Brexit bill could amount to as much as €100 billion, which would likely be paid over time rather than a lump-sum.
The recent rally has afforded the British currency to reclaim some of the losses made after the vote to leave the EU. Sterling has now lost just under 10% since June 23rd, 2016.
Broader European equities are enjoying a rally, with Frankfurt’s DAX 30 adding 0.48% to its gains and Paris’ CAC 40 0.28% stronger.
Asian equities shrugged off North Korea’s missile test overnight, as investors chose to follow US sentiment after several indices reached record highs.
Chinese stocks have continued to be volatile, as authorities attempt to deleverage the economy.
Oil slid further down as OPEC jitters take over market sentiment. It has been widely-expected that OPEC and its allies would extend production cuts into the end of 2018. However, doubts have seeped in, as Russian producers seek a cut-off point for the production curbs.
Brent oil reached a low of $62.52, before rebounding to $63.02. The US benchmark, crude oil, has fallen below $58, trading at $57.85.
OPEC are due to announce its production strategy on Thursday.
As investors await details on US tax reform, the dollar is 0.13% higher. The euro is slightly stronger against the dollar, adding 0.01%.
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