The British Pound Sterling crashed on Tuesday, March 14, after Britain’s parliament paved the way for Prime Minister Theresa May to launch divorce talks with the European Union.
The pound GBP=D4 weakened 0.5 percent to $1.2155 after both houses of parliament backed the so-called Brexit bill, opening the door for May to start the clock on the required two-year negotiation period by the end of this month.
European stocks were set for a mixed start, with financial spreadbetters expecting Britain’s FTSE 100 .FTSE and Germany’s DAX .GDAXI to dip in early trade, while France’s CAC 40 .FCHI was seen inching up.
The euro EUR=EBS lost almost 0.1 percent to $1.0645, extending Monday’s 0.2 percent loss.
On Monday, sterling had jumped 0.36 percent after Scotland’s First Minister Nicola Sturgeon demanded a new independent referendum in late 2018 or early 2019, once the terms of the UK’s exit from the EU are clearer.
The MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.2 percent, while Japan’s Nikkei .N225 closed down 0.1 percent.
Its statement earlier in the session that it had requested the extension to expand a probe into problems at its U.S. nuclear unit Westinghouse sent the shares tumbling.
Chinese shares reversed early gains after data showed retail sales cooled more than expected in the first two months of the year.
Other China data on Tuesday was more upbeat and positive for the global economy, with investment and industrial output expanding more than expected, but investors feared those signs of strength may not be sustainable.
China has cut this year’s economic growth target to about 6.5 percent to give policymakers more room to push through painful reforms to contain financial risks. The economy grew 6.7 percent in 2016, the slowest pace in 26 years.
On Monday, Goldman Sachs upgraded Chinese stocks to “overweight” on better growth prospects and a bullish view on the country’s banking sector. Its strategists cited rising producer prices and easing credit stress, and a brighter credit outlook and loan pricing for banks.
The dollar index .DXY was 0.2 percent higher at 101.49, extending Monday’s gains following a bout of profit taking at the end of last week.
The dollar gained 0.1 percent to 114.92 yen JPY=D4, but remains below the seven-week high touched on Friday on expectations of a Fed move at the end of a two-day meeting on Wednesday.
