Market participants across the city reported that Andrea Leadsom’s decision to withdraw of her Tory leader race as well as Cameron’s declaration his resignation is due on Wednesday, triggered the world to rally for relief according to The Telegraph.
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After the Brexit vote, the global stock market were shook by the tensions within the UK. But, traders are optimistic May will be able to provide stability in Brexit negotiations due to the fact that she has a “less contentious relationship with the EU” than her previous competitors.
On the market for currency the pound climbed to an intraday maximum of $1.3018 prior to closing the day trading at $1.2968 in the range of 0.11 percent over the day.
In the past, the pound sank just below $1.29 on the expectation that for the Bank of England will slash rates of interest on Thursday.
However, as the rumour mill began to roar that Leadsom was on the verge of pulling from the Tory leader race, the sterling soared to $1.30.
The City’s traders said that with May as the leader, it will ease political tensions and bring some relief to the sterling that has been battered since the Brexit decision.
Since Britain has voted to quit the EU and the pound has fallen to 31-year lows and has plunged 13.5 percent. From June 21 through July 8, the pound endured its most severe three-week slump since the currency’s crisis in 1992 which began in which Britain was exiled from the exchange rate mechanism that existed prior to the euro.
The FTSE 100 rallied 92.22 points (or 1.4 percent up to 6,682.86 the highest point since the beginning of 11 months.
It has also technically entered bull market territory, increasing by 20.7 percent from its February 11 low of 5,537.
Yet, Mike van Dulken, of Accendo Markets said: “Far from being a nice steady trend higher, investors have had to weather a rally of 17 per cent through end-April followed by an 11pc decline to Brexit day lows.
The market is also aided by the slide in the pound that is lifting the index because more than 70 % of the revenues of the FTSE comes from outside of the UK.
European exchanges also celebrated May’s triumph as the Frankurt’s DAX along with the CAC in Paris increasing by 2.1 percent and 1.8 percent and 1.8 per cent, respectively. In the US the S&P 500 rose to an intraday record peak that was 2,140.