Naharnet

Sterling Slips as Britons Head to Polls

The British pound dipped Thursday as Britons voted in a vital general election that seeks to determine the future of Brexit.

Eurozone stock markets meanwhile edged higher as dealers awaited the latest interest rate decision from the European Central Bank (ECB) at 1245 GMT.

In late morning deals, the pound declined somewhat, having spiked overnight to a ten-month peak at $1.3229 on expectations of an election win for Prime Minister Boris Johnson's Conservative Party.

Johnson has called Thursday's snap vote in a bid to gain a decisive mandate to leave the European Union on January 31, more than three and a half years after Britain narrowly voted in a referendum to leave.

"Just before voting opened, the polls suggested that a Conservative majority -- seen as the preferred market outcome... was perceived as increasingly likely," noted AJ Bell investment director Russ Mould.

However investors were sitting tight awaiting the vote outcome as polls have tightened in recent days, suggesting that a hung parliament, or no-overall majority for either the Tories or main opposition Labour party, could still occur.

- Eurozone firm before ECB -

Elsewhere Thursday, eurozone stock markets ticked higher as caution prevailed before the ECB rate call.

New president Christine Lagarde makes her first monetary policy announcements, with observers watching for clues about the bank's future direction and her plans for a major reassessment of its tools and goals.

A statement is expected to unveil no change to predecessor Mario Draghi's ultra-loose monetary policy following Lagarde's maiden meeting of the ECB's governing council in Frankfurt.

Earlier Thursday in Asia, equity markets mostly closed higher after the Federal Reserve indicated it was unlikely to change US interest rates throughout next year.

Investors are tracking developments also in the China-US trade talks, with nervousness setting in as a deadline for fresh US tariffs on Chinese goods approaches and no sign yet that they will be delayed.

While negotiations between the economic superpowers are the main focus on trading floors, the Fed's latest policy announcement stole the show Wednesday.

The central bank, which has cut borrowing costs three times this year, said after a two-day meeting it would hold them for now and set its sights on low inflation and the global economy.

- Key figures around 1145 GMT - 

Pound/dollar: DOWN at $1.3169 from $1.3196 at 2200 GMT

Euro/pound: UP at 84.54 pence from 84.35 pence

Euro/dollar: UP at $1.1134 from $1.1130

Dollar/yen: UP at 108.64 yen from 108.56 yen

London - FTSE 100: UP 0.5 percent at 7,254.79 points

Frankfurt - DAX 30: UP 0.1 percent at 13,158.43

Paris - CAC 40: UP 0.1 percent at 5,865.24

EURO STOXX 50: FLAT at 3,688.81

Tokyo - Nikkei 225: UP 0.1 percent at 23,424.81 (close)

Hong Kong - Hang Seng: UP 1.3 percent at 26,994.14 (close)

Shanghai - Composite: DOWN 0.3 percent at 2,915.70 (close)

New York - Dow: UP 0.1 percent at 27,911.30 (close)

Brent North Sea crude: UP 0.8 percent at $64.22 per barrel

West Texas Intermediate: UP 0.5 percent at $59.06 per barrel

Source: Agence France Presse


Copyright © 2012 Naharnet.com. All Rights Reserved. http://www.naharnet.com/stories/en/267200