Pound hit by Brexit worries; US escalates trade war against China – business live

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Sterling has dropped close to a one-year low as fears of a hard Brexit rise

12.20pm BST

This is from Miles Eakers of foreign exchange firm Centtrip:

non-stop for Sterling this week, following Liam Fox comments over the weekend, I would add Carney last week didn’t help too much either pic.twitter.com/EdFKnmfczZ

11.58am BST

Sterling is being hit by fears of a ‘no-deal Brexit’, says Lukman Otunuga, research analyst at FXTM.

Sterling was pounded by the Dollar and most of its major counterparts on Wednesday as fears heightened over the UK exiting the European Union without a trade deal in place.

Concerns of a potential hard Brexit scenario have haunted investor attraction towards the Pound and have left the currency vulnerable to downside shocks.

That’s an 11 month low for the pound now versus the dollar. GBPUSD sas lost 10% in the past four months: pic.twitter.com/qyoqUb9SVi

11.48am BST

Economics lecturer Daniel McLaughlin says the slide in the pound is bad news for UK consumers:

Sterling trading below $1.29 having been above $1.43 in April, with the euro back above 90 pence. A weaker currency is negative; the 15% post #Brexit fall in trade weighted terms hurt UK consumers more than it benefitted exports.

11.43am BST

Newsflash: The euro has risen over 90p against the pound for the first time since last autumn.

BREAKING: Sterling falls below 90 pence per euro for first time since November 15th 2017 pic.twitter.com/01JDfM0ry3

11.41am BST

Jordan Rochester of Japanese bank Nomura predicts the pound will keep falling ahead of the next crunch EU summit in October – when Theresa May will try to persuade leaders to back her ‘Chequers’ deal.

“We remain bearish on the pound in the short term until the Brexit mess is out the way and look for the currency to enter a $1.27-1.28 range before the leaders summit.”

10.34am BST

Ouch! The pound just fell through $1.29 for the first time since August 2017.

Cable now 1.2893 … Yikes

10.00am BST

UK holidaymakers heading to Europe this summer just suffered a blow.

The pound has weakened against the euro to its lowest level since last November, meaning trips across the channel have become a little more expensive.

“A lot of companies can’t wait for the negotiations outcome in October so a lot of course are trying to hedge against a drop in the pound.”

9.42am BST

ANZ senior China economist Betty Wang agrees that Chinese factories have benefitted from the weaker yuan – even if Beijing hasn’t been fighting a currency war.

She says:

“Currency devaluation, which may have helped exports to some extent, has been largely market-driven in our view and is not a preferred policy tool by Chinese policy makers as part of the retaliation measures.”

Chinese FX reserves rise slightly to $3.118 trillion in July … despite the yuan falling 3% in the month.
The yuan fell some 6% over June and July, yet there was no fall in FX reserves. pic.twitter.com/7xedLccgNs

9.34am BST

China’s stock market suffered losses today, after America finalised its plans for tariffs on another $16bn of exports.

The Shanghai composite index fell by 1.2%, as traders worried that the trade war keeps ratcheting up.

8.49am BST

Washington might be disappointed to see that China’s imports and exports actually rose in July, says Michael Hewson of CMC Markets:

If the US was hoping that its $34bn opening salvo of tariffs would have an effect on Chinese exports this morning’s China trade numbers would have been a disappointment to them.

Chinese exports for July saw a rise of 12.2% up from 11.2% in June, supporting the premise that for the moment we seem to be in a bit of a phoney war. We also saw a big rise in imports of 27.3% showing that domestic demand remains quite strong.

8.35am BST

China’s trade surplus with America remained close to a record high in July, despite the trade dispute.

China’s closely watched surplus with the United States dipped only slightly to $28.09 billion last month from a record $28.97 billion in June. Washington has long criticised China’s trade surplus with the United States and has demanded Beijing cut it.

Still, disagreements between the two major economic powers run deeper than just the trade balance and tensions remain over market access, intellectual property, technology transfer and investment.

8.11am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

America has fired another shot in the deepening trade dispute with China.

China directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets to generate large-scale technology transfer”.

Adjusting for seasonality and price effects, we estimate that export volumes were essentially flat in July. Shipments to the US did weaken slightly, which suggests the tariffs had some impact.

But this was offset by stronger exports to the rest of the world, most likely buoyed by the weaker renminbi.

China trade data showed stronger growth in both exports and imports, notably the latter, suggesting strong consumption both domestically and internationally.

Related: Tesla shares soar after Elon Musk floats plan to take company private

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Source: china
Link : Pound hit by Brexit worries; US escalates trade war against China – business live

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