Pound Declines Against U.S. Dollar, Yen Ahead of Article 50 -- Update
March 29 2017 - 01:50AM
Dow Jones News
By Suryatapa Bhattacharya
TOKYO--The British pound declined against the U.S. dollar and
the yen in Asia on Wednesday as investors braced for formal Brexit
procedures to be triggered by the U.K. government later in the
global day.
The pound slipped as much as 0.5% to $1.2385, its lowest
intraday level versus the greenback since January 21, before
recovering to $1.2408 around 0500GMT.
The decline started late Tuesday in New York, when the pound
fell as much as 0.9% to 1.2450 versus the dollar. The selloff
continued Wednesday in Asia. The pound also fell against the yen
hitting a low of Y137.60, its lowest level since January 17.
The currency's volatility is hinged to the U.K.'s preparation to
exit from the EU. Wednesday marks the start of a formal process
under which Britain will trigger Article 50, a measure to formally
notify its plans to leave the bloc, starting the clock on a
two-year period of negotiations over the terms of the divorce.
"The actual event is not necessarily the risk but it's the
surrounding commentary," said Bart Wakabayashi, Tokyo branch
manager for State Street Bank and Trust.
There is a consensus among market participants that the two
sides-U.K and the EU-will get the concessions they are seeking but
the concern is the process, Mr. Wakabayashi said.
"There is no shock factor here but they are starting from such
different points that there is a risk of hiccups," he added. "They
are going to be discussing completely different points of view and
that is where the [market] volatility is coming from," Mr.
Wakabayashi said.
Still, the pound's decline was supported some by the U.S. dollar
that rebounded Tuesday as investors refocused on the strength of
the U.S. economy.
The Wall Street Journal Dollar Index, a measure of the dollar
against a basket of 16 currencies, was up 0.7% at 90.11.
The Conference Board's consumer confidence index surged in March
to its highest level in 16 years. S&P CoreLogic Case-Shiller
Indices showed home prices in January rose at their fastest rate
since mid-2014.
Adding some flows back into the dollar and calming markets a bit
was U.S. data combined with market expectations that the European
Central Bank may continue to discuss easing its monetary policy,
said Koji Fukaya, chief executive of FPG Securities in Tokyo.
"Market participants are relieved on the economic front, but
some geopolitical risk in Europe remains" Mr. Fukaya said.
Interbank Foreign Exchange Rates At 00:50 EST / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31
USD/JPY Japan 111.17-18 111.14-15 +0.03 111.32 111.04 -4.98
EUR/USD Euro 1.0813-16 1.0812-15 +0.01 1.0828 1.0809 +2.80
GBP/USD U.K. 1.2410-12 1.2449-51 -0.31 1.2463 1.2377 +0.53
USD/CHF Switzerland 0.9921-25 0.9923-27 -0.02 0.9929 0.9913 -2.61
USD/CAD Canada 1.3390-95 1.3382-87 +0.06 1.3397 1.3373 -0.36
AUD/USD Australia 0.7642-46 0.7633-37 +0.12 0.7657 0.7631 +6.14
NZD/USD New Zealand 0.7005-11 0.7013-19 -0.11 0.7019 0.6998 +1.20
Euro Rates
EUR/JPY Japan 120.21-25 120.16-20 +0.04 120.46 120.07 -2.33
EUR/GBP U.K. 0.8712-15 0.8684-87 +0.32 0.8737 0.8679 +2.21
EUR/CHF Switzerland 1.0730-33 1.0730-33 0.00 1.0735 1.0726 +0.11
EUR/CAD Canada 1.4478-88 1.4466-76 +0.08 1.4493 1.4461 +2.45
EUR/AUD Australia 1.4141-51 1.4160-70 -0.13 1.4169 1.4124 -3.14
EUR/DKK Denmark 7.4400-07 7.4398-405 +0.00 7.4407 7.4395 +0.08
EUR/NOK Norway 9.2123-73 9.2149-99 -0.03 9.2192 9.2136 +1.36
EUR/SEK Sweden 9.5457-557 9.5458-558 0.00 9.5557 9.5453 -0.25
EUR/CZK Czech Rep. 27.005-35 27.006-36 0.00 27.026 27.016 +0.01
EUR/HUF Hungary 309.56-96 309.52-92 +0.01 309.79 309.56 +0.09
EUR/PLN Poland 4.2403-21 4.2397-415 +0.01 4.2422 4.2393 -3.68
Yen Rates
AUD/JPY Australia 84.97-5.01 84.84-88 +0.15 85.17 84.76 +0.91
GBP/JPY U.K. 137.95-8.01 138.35-41 -0.29 138.52 137.61 -4.53
Source: Tullett Prebon
Write to Suryatapa Bhattacharya at
suryatapa.bhattacharya@wsj.com
(END) Dow Jones Newswires
March 29, 2017 01:35 ET (05:35 GMT)
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