CURRENCIES: British Pound Hits Two-year Low With Brexit Pressure Unabated
17 July 2019 - 12:33PM
Dow Jones News
By Steve Goldstein, MarketWatch
The British pound on Wednesday traded at its lowest level in
more than two years, as concerns about the prospect of a hasty exit
from the European Union continued to pressure the U.K.
currency.
The poundfell as low as $1.2382 vs. the U.S. dollar, down from
$1.2407, marking the lowest level since April 2017.
Against the euro, the poundfell as low as EUR1.1048, down from
EUR1.1068.
Boris Johnson, the front runner to become the leader of the
Conservative Party and therefore prime minister, was reported by
Sky News
(https://news.sky.com/story/boris-johnson-team-considering-plan-to-suspend-parliament-in-run-up-to-brexit-11764347)
to be considering suspending parliament for two weeks to prevent it
from blocking a Brexit. His campaign said that it's an option but
that nothing has been decided.
Another issue is that both Johnson and his Conservative Party
rival, Jeremy Hunt, have said they will not accept the so-called
Irish backstop deal agreed by the current prime minister, Theresa
May, with the European Union. The winner of the Tory party's vote
is expected to be announced on July 23.
"The rising perceived probability of a disorderly Brexit after
the Oct. 31 deadline is reflected in the options market, with the
sterling implied volatility curve heavily kinked around the
deadline date (that is 3-4 month tenors) vs the close-to-normally
upward sloping shape of the curve two to three months ago," said
strategists at ING in a note to clients.
The data released Wednesday met economist expectations. Consumer
prices in the 12 months ending June stayed at 2%, right at the Bank
of England's target.
(END) Dow Jones Newswires
July 17, 2019 07:18 ET (11:18 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.