Mexican peso rises after Trump-Clinton
debate, pound falls again
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[October 10, 2016]
By Nigel Stephenson
LONDON (Reuters) - Sterling fell again on
Monday, after largely recovering from Friday's "flash crash", while the
Mexican peso and U.S. stock futures rose as investors saw less chance of
Republican nominee Donald Trump winning next month's presidential
election.
The pound dropped half a percent against a dollar boosted by
expectations the Federal Reserve will raise interest rates in December
even after slightly weaker than expected jobs data on Friday.
The UK currency <GBP=> last stood at $1.2402, down 0.2 percent. Its
trade-weighted index <=GBP> fell 0.7 percent to its lowest since early
2009.
"I guess that we have to prepare for further weakness," said Hans
Redeker, head of G10 currency strategy at Morgan Stanley in London.
In early Asian trade on Friday, it fell 20 percent to a three-decade low
of $1.1491 in minutes as a fall on investor concerns over Britain's
impending exit from the European Union snowballed as automated computer
trades were triggered.
Britain's FTSE 100 <.FTSE> fell 0.1 percent but outperformed other major
European stocks as the internationally-focused companies on the index
gain on overseas revenues and competitiveness when the pound fall.
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The more domestically-focused FTSE 250 index <.FTMC> was down 0.2
percent and British 10-year government bond yields <GB10YT=RR> rose 1.3
basis points to 0.992 percent.
The pan-European STOXX 600 index <.STOXX> fell 0.4 percent. One of the
leading fallers was Deutsche Bank <DBKGn.DE>, down nearly 3 percent
after Chief Executive John Cryan failed to secure a speedy deal with the
U.S. Department of Justice at the weekend over the misselling of
mortgage-backed securities.
Another notable mover on currency markets was the Mexican peso <MXN=D2>,
which at one point was up 2 percent at 18.91 to the dollar as Trump's
chances of winning the White House seemed diminished after the second
pre-election debate with Democratic Party candidate Hillary Clinton.
Trump has vowed to build a wall on the border with Mexico and
renegotiate or scrap the North American Free Trade Agreement (NAFTA) if
he is elected, making the peso somewhat of a barometer of his chances.
The Mexican currency was last up 1.9 percent at 18.96 per dollar.
A CNN/ORC snap poll of debate watchers found that 57 percent thought
Clinton won the encounter, versus 34 percent for Trump.
U.S. stocks index futures <ESc1> <1YMc1> were up about 0.2 percent,
suggesting Wall Street will open higher. U.S. stock markets are open on
Monday, though the bond market is closed for the Columbus Day holiday.
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A woman walks past stock quotation board outside a brokerage in
Tokyo, Japan, September 9, 2016. REUTERS/Kim Kyung-Hoon
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Earlier, Asian shares eked out minor gains. MSCI's broadest index of
Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was up 0.1
percent. Japanese markets were closed for a holiday.
Chinese shares <.CSI300><.SSEC> racked up their biggest gains in two
months as investors returned from a week-long holiday and caught up
with gains on global markets.
YUAN
China's yuan, however, hit a six-year low against the dollar before
recovering. The People's Bank of China set the weakest fix for
currency since September 2010 and in the spot market fell as low as
6.7051, also its lowest since September 2010.
It last traded at 6.7025 <CNY=CXFS>, down just 0.03 percent on the
day.
Oil prices fell, with investors sceptical an agreement among members
of the Organization of the Petroleum Exporting Countries (OPEC) to
cut output would have a major impact.
Brent crude, the international benchmark, was down 18 cents at
$51.73 a barrel.
"A meeting between OPEC and non-OPEC producers (namely Russia) will
add to oil headlines this week. Don't expect a firm agreement from
Russia, but headlines about cooperation are likely," Morgan Stanley
said.
Gold <XAU=> last traded at $1,263 an ounce, up 0.6 percent, lifted
by demand from returning Chinese investors.
(Additional reporting by Wayne Cole in Sydney, Henning Gloystein in
Singapore and Patrick Graham in London; Editing by Toby Chopra)
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