Asian stocks and the pound gained on Tuesday as investors held out hope that Britain still had a chance of avoiding a messy exit from the European Union at key negotiations this week.Australian shares were up 0.17 per cent, while Japan’s Nikkei stock index was up 1.86 per cent.
Reports of a “Phase 1” trade deal between the United States and China last week had earlier cheered markets but the dearth of details around the agreement has since curbed this enthusiasm with oil prices extending declines, Chinese stocks weaker and the safe-haven yen holding gains versus dollar. “If there is a deal, sterling would rally and risk assets would rally, but the reaction could be limited to a day.”
British Prime Minister Boris Johnson wants to strike an exit deal at an EU summit on Thursday and Friday to allow an orderly departure on Oct. 31. In the currency market, sterling rose 0.17 per cent to 1.2632 dollars, approaching a three-month high of 1.2708 dollars.The yen often considered a safe haven in times of economic uncertainty, held steady at 108.33 versus the dollar.