International News

HONG KONG, (APP/AFP) – The pound fell Monday
to around 30-year lows but most Asian stock markets rebounded from hefty losses fuelled by Britain’s decision to leave the European Union, despite fears of months of uncertainty.
Sterling plunged two percent in early Asian trading before paring losses as dealers rushed into safe assets, although Japan’s Nikkei stock index rallied. Britain’s finance minister George Osborne looked to reassure markets, saying the economy was in rude health.
The surprise Brexit decision wiped $2.1 trillion off market valuations Friday and sent the pound slumping to a 31-year low against the dollar.
The pound bought $1.3440, down from $1.3670 in New York and heading back towards the $1.3229 touched Friday, which was its lowest level since 1985.
Stephen Innes, senior trader at OANDA Asia Pacific, warned sterling “is extremely vulnerable” and predicted an interest rate cut in the summer.
He also said there was “a huge concern that London’s status as the global financial capital will crumble” if it losses its “passporting” rights, which permit banks to locate themselves in the UK while offering products and services in the wider EU.
Investors were also shifting out of other higher-yielding riskier
currencies, which took a hammering last week.
South Korea’s won fell 0.3 percent, the Australian dollar slipped 0.7
percent and the Singapore dollar shed 0.2 percent. Malaysia’s ringgit slipped 0.3 percent and the Philippine peso 0.2 percent.
China weakened the yuan’s fixing almost one percent to a five-and-half-year low against the dollar, in the biggest downward move since August’s devaluation.