EU grants Brexit extension

AFP . London | Update:

An employee hangs a Union Jack at the entrance of Consilium building at the EU Headquarters in Brussels on 28 October 2019. Photo: AFPThe pound steadied versus the dollar and London’s stock market flattened on Monday after the European Union granted an extension to Brexit until the end of January.

Around 1200 GMT, sterling was almost unchanged at $1.2826 compared with late in New York on Friday.

London’s benchmark FTSE 100 stocks index dipped 0.1 percent, while Frankfurt and Paris rose.

European Union members on Monday agreed to postpone Brexit for up to three months, stepping in with a decision less than 90 hours before Britain was due to crash out with no divorce deal.

The next deadline is now 31 January-- although the EU would allow an earlier date should London ratify a withdrawal agreement sooner.

“The pound has remained fairly muted off the back of the announcement, and it seems as though its position will be largely dictated by general election news over the next few weeks,” said Sebastien Clements, currency analyst at OFX trading group.

In a bid to strike a deal as soon as possible, British Prime Minister Boris Johnson was to ask parliament to vote Monday for a snap general election.

But it is likely to fail, with the main opposition Labour party insisting it would not back an election until Johnson’s threat of leaving the EU still without a deal is completely removed.

“The decision to provide an extension must be seen as a positive thing, given how close we are to a disorderly Brexit,” said Joshua Mahony, IG senior market analyst.

“However, while a no-deal has been averted for now, this extension points to more uncertainty and economic decline as businesses remain in the dark over where the country is heading.”

Brexit uncertainties are impacting the outlook for HSBC, the British banking giant said Monday as it posted a dip in third-quarter profits.

Around midday, shares in the lender were down four percent at £5.92, making them the top faller on the FTSE 100 index.

In earlier Asian trading, stock markets climbed after China and the US said they were close to agreeing a mini trade deal.

Investors tracked Friday’s strong lead from Wall Street, where the S&P 500 flirted with more record highs.

Elsewhere, bitcoin soared more than 15 percent to nearly $10,000 -- its highest level for a month—before ticking back slightly. 

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