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Pound extends rally as post-Brexit markets calm

London - The pound extended its advance from a three-decade low as traders took advantage of the global market rout to go on a buying spree.

Stocks, oil and higher-yielding eurozone bonds all recovered some of the losses seen in the wake of Britain’s vote to leave the European Union. That’s even as investors - and European leaders meeting in Brussels - waited to see how the nation will execute its departure from the world’s largest single market.

Brexit is currently in deadlock because the UK itself must trigger the exit process following its June 23 referendum. Yet Prime Minister David Cameron announced his resignation on the morning the "Leave" result came in, and has repeatedly said that it’s for his successor - who’s not likely to be selected until September - to begin the proceedings.

That’s frustrating his EU colleagues, many of whom want the process to start as soon as possible.

"Markets have calmed down somewhat," said Thu Lan Nguyen, a foreign-exchange strategist at Commerzbank in Frankfurt.

"We may see some short-term continuation of the recovery in the pound if there’s an increased chance of a new prime minister who can secure the access of the UK to the single market. But uncertainty is still high and market participants are jittery."

The pound rose 0.3% to $1.3386 as of 10:30 a.m. in London, a day after gaining 0.9%. Britain’s currency tumbled 8.1% on Friday, the biggest decline on record, and on Monday sank further to $1.3121, the lowest since 1985.

It’s still down 9% since Britons went to the polls to decide on their future relationship with the rest of Europe.

Sterling gained 0.5% to 82.56 pence per euro, after touching a more than two-year low of 83.80 pence on June 27.

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