INTERNATIONAL – European stocks recovered but sterling and the euro remained fragile on Friday, after some of the most dramatic 24 hours yet in the Brexit process and another turbulent week for world markets.
London, Paris and Frankfurt markets all gained around 0.4 percent, having been punished the previous day by the resignation of Britain’s Brexit minister roughly 12 hours after a draft agreement with the European Union was released.
Sterling also attempted to reset after what had been its worst day against the euro since the post-Brexit vote fallout of 2016 and a slump of more than 2 cent versus the dollar.
But with reports of a UK leadership coup still rife and fear that the country could crash out of the EU without an agreement, it struggled to make it much beyond 88.72 pence per euro and $1.2788.
“As long as no deal remains as likely as it is, there is a risk of a sterling depreciation spiral that is self-intensifying,” said Ulrich Leuchtmannan, an FX strategist at Commerzbank in Frankfurt.