Pound gains as May seeks another delay on Brexit

AFP – The pound advanced Tuesday after British Prime Minister Theresa May said she would seek another extension from the EU on Brexit, signaling she could accept a closer relationship with Europe to break months of political deadlock.

May’s latest statement — which came on a day that most leading stock markets finished flat or slightly higher — bolstered confidence that a dreaded "hard" Brexit could be averted.

May also offered to work with the leader of the main opposition Labor Party, Jeremy Corbyn, who favors closer ties with the European Union, a move that enraged the Brexit-supporting wing of her Conservative Party.

"This is a decisive moment in the story of these islands. And it requires national unity to deliver the national interest," May said in a televised address.

May’s openness to meeting with Corbyn is "an attempt to break the deadlock," said Brendan McKenna, a currency strategist at Wells Fargo.

"It’s really more about optimism but people see it as a way of avoiding a no-deal outcome," he added.

Brussels has set Britain an April 12 deadline to either pass the divorce deal it agreed with May four months ago, settle on an alternative, or leave the EU without an agreement.

In reality, the deadline is even closer as the EU has called an emergency leaders summit for April 10.

EU president Donald Tusk responded cautiously to May’s statement, saying: "Even if, after today, we don’t know what the end result will be, let us be patient."

– Global rebound at risk –

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Weakness in the pound had lifted the FTSE 100 earlier, while Paris and Frankfurt and Paris also rose and Tokyo ended flat.

US stocks finished mixed, with some market watchers seeing signs of buyer’s fatigue after Monday’s rally and a downcast outlook from IMF chief Christine Lagarde weighing on sentiment.

Lagarde, in a speech ahead of next week’s spring meetings at the IMF and World Bank, signaled the fund would further trim its global growth forecast in light of Brexit, trade tensions and other issues.

"The expected rebound in global growth this year is precarious," she said in an address at the US Chamber of Commerce. "This is a delicate moment that requires us to handle with care."

Airline shares got a boost after Delta Air Lines lifted its first-quarter profit forecast, citing "record-setting" operational performance in March.

Delta surged 6.0 percent, while American Airlines and United Continental both gained around two percent.

Facebook jumped 3.3 percent following a positive note from Deutsche Bank, which said a plan to add a "checkout feature" to Instagram that allows users to place orders for goods could add $10 billion in revenue in 2021.

– Key figures around 2040 GMT –

Pound/dollar: DOWN at $1.3137 from $1.3103 at 2100 GMT on Monday

Euro/pound: UP at 85.27 pence from 85.58 pence

Euro/dollar: DOWN at $1.1202 from $1.1213

Dollar/yen: DOWN at 111.36 yen from 111.35 yen

New York – Dow: DOWN 0.3 percent at 26,179.13 (close)

New York – S&P 500: FLAT at 2,867.24 (close)

New York – Nasdaq: UP 0.3 percent at 7,848.69 (close)

London – FTSE 100: UP 1.0 percent at 7,391.12 points (close)

Frankfurt – DAX 30: UP 0.6 percent at 11,754.79 (close)

Paris – CAC 40: UP 0.3 percent at 5,423.47 (close)

EURO STOXX 50: UP 0.3 percent at 3,395.70 (close)

Tokyo – Nikkei 225: FLAT at 21,505.31 (close)

Hong Kong – Hang Seng: UP 0.2 percent at 29,624.67 (close)

Shanghai – Composite: UP 0.2 percent at 3,176.82 (close)

Oil – Brent Crude: UP 36 cents at $69.37 per barrel

Oil – West Texas Intermediate: UP 99 cents at $62.58 per barrel

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