SYDNEY (Reuters) - Asian share markets rallied on Monday as favorable U.S. jobs data whetted risk appetites, while sterling slipped after two members of the British government resigned over Brexit and put the future of Prime Minister Theresa May in doubt.
The pound peeled off around a third of a U.S. cent to $1.3290 GBP=D3 as news broke British Brexit Secretary David Davis and Brexit Minister Steven Baker had resigned.
The loss came just two days after a meeting at May’s Chequers country residence supposedly sealed a cabinet deal on Brexit and underlines the deep divisions in her ruling Conservative Party over the departure from the EU.
“The outlook for the pound had brightened in recent weeks,” said Westpac senior currency analyst Sean Callow, seeing a chance this could turn out positive for the currency.
“If the U.K. government presses ahead with this plan despite the unexpected resignation of “hard Brexit” officials and with the US dollar losing momentum, sterling should be able make a run at $1.35 multi-day.”
Sentiment in other markets was mostly positive after Friday’s U.S. payrolls report showed tame wages and more people looking for work.
“The combination of rising employment and increased labor force participation suggests healthy but not tightening labor market conditions in June, something that will allow the Fed to continue to hike rates at a gradual pace,” said Kevin Cummins, a senior U.S. economist at RBS.
The balanced report helped Wall Street end last week in the black and Japan's Nikkei .N225 followed up with gains of 1.4 percent on Monday.
MSCI’s broadest index of Asia-Pacific shares outside
