Business

Asian trade sees pound hovers around 31-year low

Pound and US dollar notes Image copyright Getty Images

The pound continues to hover around 31-year lows in Asian trading as more UK property funds suspend withdrawals in the wake of Brexit.

However, the Japanese yen is rising for a third day against the dollar as investors buy into the currency, seen as a safe haven for their money.

It has strengthened by nearly 5% since the UK vote to exit the European Union.

The renewed jitters over the fallout from the Brexit vote have also extended a rally in gold prices.

The precious metal is trading near its highest price in more than two years.

On Wednesday UK and European stock markets fell sharply and the pound hit a fresh 31-year low as Brexit fears rattled markets.

Another three UK property funds said they were suspending trade after a surge in withdrawals following the UK's vote to leave the EU.

In Thursday's Asian trade the pound remained lower against the dollar, trading at around $1.2918.

Fed minutes

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Asian stock markets are trading mixed after the latest Federal Reserve minutes showing that prospects of an interest rate hike have diminished.

The US central bank's last meeting in June took place before the UK's EU referendum.

However policymakers were concerned the vote would heighten global market uncertainty and potentially hurt the US economic outlook.

They were also worried about a possible slowdown in the US labour market following weaker-than-expected payroll data.

Japan's benchmark Nikkei 225 share index fell for a third straight session to close 0.7% lower at 15,276.24 points. The broader Topix also fell 0.7% to 1,226.09.

South Korea's Kospi index gained 1.07% to close at 1,974.08 points.

In Greater China, Hong Kong's Hang Seng index was up 1% to close at 20,706.92 while the Shanghai Composite wrapped trading flat at 3,016.85.

Australia downgrade

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Australia's share market and its currency both fell after ratings agency S&P downgraded its outlook on the country's sovereign debt.

The Australian dollar fell half a US cent to $0.7470 after the move. The S&P/ASX 200 index ended up closing 0.6% higher at 5,227.90 points.

Australia's top AAA credit rating was reduced to "negative" from "stable" because of its large budget deficit and political risks stemming from the inconclusive elections held over the weekend.

Shane Oliver, head of investment strategy and chief economist at AMP Capital said a downgrade is "not disastrous" but a bad sign for Australia.

"Australia has now seen years of slippage in returning the budget to surplus and the messy election outcome threatens more slippage whichever way it goes," he said.

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