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How low will it fall? The pound continues to dive on 'no-deal' Brexit fears

Oscar Williams-Grut
pound

Markets Insider



LONDON — The pound's extended slump continued on Thursday as it fell to a fresh low against the dollar.

Sterling is down 0.2% the dollar to $1.2858 at 9.45 a.m. BST (4.45 a.m. ET), marking a fresh 11-month low. The pound is up 0.03% against the euro to €1.1101, still trading close to 9-month lows.

Connor Campbell, a marketing analyst at SpreadEx, said in an email on Thursday morning: "The fears of a ‘no deal’ Brexit have really gathered steam in the last few sessions, a snowball effect stemming from Mark Carney and Liam Fox’s warnings either side of the weekend."

The deadline for Britain to leave the EU is March 2019 and the UK government has so far made little progress in agreeing on a post-Brexit trading deal with the EU.

Bank of England Governor Mark Carney and the UK's International Trade Secretary, Liam Fox, have both highlighted the rising likelihood of a no-deal Brexit in recent weeks, warning that Britain could crash out of the EU without any deal on its future trading relationship with the bloc.

Michael Hewson, the chief market analyst at CMC Markets UK, said in an email: "Whether you believe such a scenario is likely or not, such is the incompetence of this government, as well as its opposition, investors would be foolhardy not to take some steps to hedge against such an outcome."

Fiona Cincotta, a senior market analyst at City Index, said: "Brexit concerns are likely to remain the key driver for the currency until Friday when preliminary second-quarter UK GDP data will be released alongside the June manufacturing and industrial production figures."

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