Pound jumps on Brexit hopes as global stocks firm

The British pound hit a seven-week high against the dollar Friday amid easing fears of a no-deal Brexit.

Stock markets meanwhile won support after China said some US agricultural products including pork and soybeans would be exempt from added tariffs, ahead of trade talks between Beijing and Washington scheduled for October.

After flirting with new records, US stocks treaded water as investors awaited the outcome of next week’s monetary policy meeting of the Federal Reserve, which is widely expected to deliver the second interest rate cut of the year.

Adam Sarhan of 50 Park Investments told AFP the day’s subdued trading was a “normal and healthy action after a big rally.”

“This is the perfect area for the market to pause before it tries to reach new highs,” he said.

Beijing’s trade announcement was the latest in a new series of conciliatory measures between the world’s two biggest economies, who for the past year have been locked in a bitter trade war resulting in tit-for-tat tariffs on hundreds of billions of dollars in bilateral trade.

‘Most terrible example’

In foreign exchange, the pound was in focus after the British currency jumped to its highest level since late July.

The pound “has rallied… as traders are less fearful about the possibility of a no-deal Brexit,” said David Madden, analyst at CMC Markets UK.

Parliament passed a law earlier this month aimed at preventing a no-deal Brexit, but Prime Minister Boris Johnson is adamant Britain will still leave the EU on schedule October 31 with or without a withdrawal agreement.

The speaker of Britain’s House of Commons, John Bercow, said disobeying the law “would be the most terrible example to set to the rest of society.”

In a speech in London on Thursday, Bercow warned that if the government came close to doing so, parliament “would want to cut off such a possibility and do so forcefully.”