Sterling fell to a fresh 31-year low
Sterling fell to a fresh 31-year low against the dollar as Asian markets opened on Wednesday.
The pound hit $1.2861, more than 15% below the levels seen on the day of the EU referendum, in early trading.
Brexit Erodes U.K. Economic Pillars, Property Investors Flee
Pillars of the U.K. economy are starting to shudder as the cost of Brexit hits home.
Three asset managers froze withdrawals from real-estate funds following a flurry of selling and the pound plunged to a 31-year low less than two weeks since the nation backed quitting the European Union.
“I am expecting quite a sharp reduction in investment spending, a sharp hit to the commercial property market, probably a check to consumer spending, all of which could push us towards zero or below growth,” John Gieve, a former deputy governor of the Bank of England and veteran of the last crisis, told Bloomberg Television.
Japanese cabinet secretary says economy’s fundamentals are solid
Japan’s Deputy Chief Cabinet Secretary Hiroshige Seko said Wednesday that the current volatility in financial markets was due to risk aversion, but that the country’s economic fundamentals remain firm.
Seko said risk-off selling — which followed falls in the European markets and rises in the Japanese yen — was likely weighing on the Nikkei Stock Average on Wednesday.
But he said he would refrain from commenting on specific movements in foreign-exchange, stock and bond markets.
“Fundamentals in the Japanese economy are firm,” considering the tight job market and improving wage conditions, he said.
Yuan in Longest Losing Streak Since February as Forecasts Cut
The yuan headed for the longest run of declines since February as lenders including ABN Amro Bank NV weakened their forecasts for the Chinese currency, citing additional pressure from Britain’s vote to leave the European Union.
The People’s Bank of China will allow a weaker yuan against the greenback because it will focus on keeping its exchange rate stable versus a trade-weighted basket, ABN Amro strategist Roy Teo wrote in a note Tuesday. He downgraded the yuan’s year-end estimate to 6.8 a dollar from 6.7 previously. Goldman Sachs Group Inc. cut its 12-month estimate for the yuan’s fixing to 7 from 6.8, while Credit Agricole CIB revised its prediction of an annual gain in the exchange rate to a decline.
An index tracking the yuan versus 13 peers has dropped for eight of the nine days since Britain’s referendum, spurring speculation the Chinese central bank is seeking further depreciation as the risk of slower growth in the EU threatens exports. The yuan has under-performed Asian currencies against the dollar and the pound since the June 23 Brexit vote.
Oil prices edge up amid Brexit concerns, supply risks
Oil prices were slightly higher after falling earlier in Asian trading on Wednesday amid the wider market turmoil set off by mounting concerns over the economic impact of Britain's vote to leave the European Union.
U.S. crude was up 4 cents at $46.64 a barrel at 0635 GMT, after initially gaining then falling in thin trade. The contract fell 5percent to end at $46.60 on Tuesday as U.S. investors digested news of an OPEC increase in production after the July 4 holiday on Monday closed trading.
Brent futures were up 5 cents at $48.01. On Tuesday they settled down 4.3 percent at $47.96 a barrel.
Reference: Reuters,MarketWatch,Bloomberg,
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