September 4, 2019
The British pound rebounded slightly after it fell to its weakest level against the US dollar in nearly three years amid mounting political uncertainty over Brexit.
Foreign exchange experts said the pound was ‘being sold all over the place’ amid fears MPs will not be able to block Boris Johnson pursuing a No Deal Brexit.
Sterling was 0.9 per cent lower against the US dollar at $1.196 yesterday morning, which marked its lowest level since the ‘flash crash’ in October 2016.
It had earlier fallen below $1.20 for the first time since January 2017. The pound was also trading lower against the euro, down 0.6 per cent at €1.09.
Later in the day it clawed back some of its losses ahead of the crunch vote in the House of Commons last night, and ended the day at $1.20.
A messy exit from the EU is expected to weaken the pound, but it could hit other currencies and other markets as investors get stop trading in riskier assets.
It comes after the pound tumbled 0.8 per cent yesterday in its biggest decline in more than three weeks.
Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo, said: ‘The pound is being sold all over the place.
‘The political risk has forced us to recognise that a no-deal Brexit is possible. At this point, I see no reason to stay long in sterling.’
Experts said an election would spark another pound fall, which could hit levels last seen under Margaret Thatcher in the 1980s, excluding the 2016 ‘flash crash’.
This article was posted: Wednesday, September 4, 2019 at 2:28 am