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Markets Shake Off WHO Global Emergency Declaration, GBP Riding High On Brexit Day

Published 31/01/2020, 09:04
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Ignoring the World Health Organisation’s declaration of a global emergency regarding the coronavirus outbreak, the European markets avoided another round of sharp losses on Friday.

Lifted somewhat by a better than forecast Chinese services PMI, and choosing to turn a blind eye to a Q4 contraction in France, the DAX and CAC rose 0.2% and 0.3% respectively. Nothing compared to the suffering seen on Thursday, but, at least, better than the alternative.

The FTSE wasn’t quite so fortunate, dipping 0.2% to remain at a 7-week low of 7360. However, the size of that decline means it can be pinned on the pound’s own gains, rather than a fresh bout of coronavirus concern.

Despite Friday being Brexit Day, the UK leaving the EU around 3 years, 7 months and 1 week on from the original referendum, sterling was in a very good mood.

Still riding high from the fact the Bank of England didn’t cut rates on Thursday, while perhaps expressing some relief that Britain can move onto the more important trade negotiations part of Brexit, the pound added 0.4% against the dollar and 0.5% against the euro.

That sent cable to an 8-day high of $1.314, while leaving sterling at a near-7 week peak of €1.1915 against its single currency cousin.

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