Sterling tumbles to 31-year low; oil up, stocks slip
- Top 10 News for 12/2: Crude Rips on OPEC Cut; Starbucks' Schultz Steps Down; Nonfarm Payrolls Flat in Nov.
- Unemployment Rate Drops to 4.6%
- Bond yields slip on U.S. jobs data, euro steady before Italy vote
- Alibaba (BABA) Founder Jack Ma Discuss Plans to Retire; 'I Don't Want to Die at the Office'
- Starbucks Coffee (SBUX) CEO Howard Schultz to Step Down, Appointed Executive Chairman; Kevin Johnson New CEO
A man walks past a stock quotation board outside a brokerage in Tokyo, Japan, September 9, 2016. REUTERS/Kim Kyung-Hoon
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
By Rodrigo Campos
NEW YORK (Reuters) - Sterling slumped to a 31-year low versus the U.S. dollar on Tuesday as concerns over Britain's separation from the European Union were compounded by renewed strength of the greenback on a recent string of better-than-expected economic data.
Both Brent and U.S. crude oil rose late despite the dollar's strength on a surprise U.S. crude stockpile drawdown.
Sterling hit its weakest since mid-1985, hit by a growing sense that Britain may be heading for a 'hard' exit from the EU in which it severs links to the single market in favor of total control over immigration.
Such a move could crimp London's ability to remain a global financial hub.
"Everything people are hearing from the UK is not positive for its currency," said Paresh Upadhyaya, director of currency strategy at Pioneer Investments in Boston.
London's FTSE <.FTSE> cheered the idea of a weaker pound boosting firms' exports, rising 1.3 percent to its highest in more than a year and within half a percentage point of its record high hit in April 2015. [.EU]
On Wall Street traders withdrew from interest-rate-sensitive stocks as recent U.S. data including a strengthening manufacturing sector and upward revision to second-quarter gross domestic product has boosted bets of a rate hike by the Federal Reserve before the year ends. Traders now see above-even chances of a rate increase in December.
Rate-sensitive stocks like utilities, telecoms and real estate posted the largest percentage drops among S&P 500 sectors. Broadly, U.S. stocks were also weighed by the uncertainty over Britain's divorce from the EU.
"Clearly there has been some reverberation from across the pond in terms of the prospect for a slightly more disorderly UK separation from the EU," said Bill Northey, chief investment officer for the private client group at U.S. Bank in Helena, Montana.
The Dow Jones industrial average <.DJI> fell 85.4 points, or 0.47 percent, to 18,168.45, the S&P 500 <.SPX> lost 10.71 points, or 0.5 percent, to 2,150.49 and the Nasdaq Composite <.IXIC> dropped 11.22 points, or 0.21 percent, to 5,289.66.
The pan-European FTSEurofirst 300 index <.FTEU3> rallied to close up 0.9 percent, while MSCI's gauge of stocks across the globe <.MIWD00000PUS> ticked down 0.2 percent, weighed by Wall Street's decline.
Asian shares had finished modestly higher overnight led by a 0.8 percent rise from Japan's Nikkei <.N225>. Nikkei futures
Crude oil prices jumped in post settlement trading after a surprise large draw in inventories in the United States. Crude stockpiles tumbled unexpectedly last week as imports dropped, data from the American Petroleum Institute showed.
The dollar index, which tracks the currency against a basket of major peers, rose 0.5 percent to 96.137 <.DXY>. The greenback climbed to 102.88 yen
U.S. Treasury yields rose. Benchmark 10-year notes
Spot gold prices
(Additional reporting by Barani Krishnan, Noel Randewich and Richard Leong; Editing by Meredith Mazzilli and James Dalgleish)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UPDATE: Fed Says U.S. Economy Continued to Expand Across Most Regions - Beige Book
- Turkish tenders in lira, Erdogan says in attempt to boost currency
- Guantanamo detainee released to Cabo Verde
Create E-mail Alert Related CategoriesForex, Reuters
Related EntitiesCrude Oil
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!