Sterling extends slide below $1.25 as no-deal Brexit jitters jump

UK's Johnson declines to comment on plan to facilitate a no-deal Brexit

UK's Johnson declines to comment on plan to facilitate a no-deal Brexit

The pound meanwhile continued to suffer on Tuesday despite data confirming low United Kingdom unemployment.

Sterling was under pressure as investors were nervous about the prospect of euroskeptic Boris Johnson winning the Conservative party leadership contest and becoming the next British prime minister as early as the end of this month.

"Should this scenario materialise, pound-dollar could fall into the $1.00-$1.10 range". "Markets have adjusted these probabilities sharply lower", the note added.

Johnson and Hunt both made their opposition clear to the Northern Irish backstop during the debate. The pound also weakened to new a six-month low versus the euro of 90.42 pence, down 0.5% on the day.

The pound was taking another hiding with the possibility of a no-deal Brexit growing ever more likely as the two contenders to become prime minister slug it out by trying to take increasingly tough lines with the EU.

The pound dropped to $1.2382, its lowest since April 2017, but recovered some lost ground by late afternoon in London to trade at $1.2433.

Viagogo suspended from advertising on Google
The CMA launched legal action against Viagogo in August past year over worries that it could be breaking consumer-protection law. Industry body UK Music has been among the organisations encouraging Google to take this step for some time.

The Pound could begin to sink today if the vote fails to pass through, further heightening no-deal Brexit fears between the European Union and the UK. "The market does still see predominant pound-idiosyncratic risks but in my opinion might still be too optimistic about how these risks will eventually play out".

The pound has lost 6% of its value against the currency since the start of May, meaning the amount of euros United Kingdom tourists receive when exchanging £500 has fallen from around 580 to 555.

The euro hit a one-week low against the dollar and towards the lower end of this year's trading range, weighed down by expectations of easing from the European Central Bank and investors' preference for the higher-yielding US currency.

"Clearly the issues facing the United Kingdom now have not been faced in the last decade or so, even during the global financial crisis and the potential for the pound to hit the 2016 lows is there", said BNY Mellon senior currency strategist Neil Mellor in London.

In October 2016, the British currency dropped briefly below $1.15, its lowest in more than three decades, during a flash crash in the currency markets in early Asian trading hours.

Regarding the US-China trade war meanwhile, US President Donald Trump has said Washington and Beijing were still a long way from a deal and that he still could impose higher tariffs on Chinese imports if he did not get his way. The IMF's chief economist, Gita Gopinath, said Germany was running an excessive current account deficit.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.