XTB | Oct 08, 2019 10:25
There’s been some selling seen in the pound in recent trade after the latest reports have poured cold water on the hopes of the UK and EU reaching a new Brexit agreement before month end. Laura Kuenssberg has quoted a no 10 source on Twitter that talks in Brussels are “close to breaking down” with the political editor for the BBC stating that it feels like any chance of a deal this month just died.
Given the lukewarm reaction to the government’s proposals last week this shouldn’t come as too much of a surprise, and now it seems increasingly likely that we get a general election almost solely focused on Brexit before the year is out.
The pound is trading lower against all its peers on the day and is back near its lowest level of the month against the US dollar, trading around 1.2250 last.
The worst performing blue-chip in London this morning is the London Stock Exchange Group PLC (LON:LSE) with shares falling by as much as 6% after Hong Kong Exchange and Clearing Ltd (HK:0388) announced it would drop its £32B takeover offer. Shares in LSE have surged higher in recent months as speculation mounted that a takeover was on the cards, but given the current political disruption in Hong Kong it always seemed at least a tad optimistic to think this would go through without some serious resistance. There’s been a clear trend of consolidation amongst the world’s largest trading exchanges in recent years and while this latest attempt has come up short, it would not be too surprising for the LSE to be subject to further takeover interest going forward - especially if the pound remains at the current depressed levels that make the valuation more attractive to foreign investors.
Written By: XTB
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