The sterling fell sharply on growing expectations that a Brexit impasse is ahead once more. Pound has weakened more than 1% this month.
Sterling has fallen for eight consecutive days against the dollar despite mostly solid economic data in Britain in recent months. The worry over Britain’s exit from the European Union continues.
Cross-party talks expose deep political divisions over how, when and even if Brexit should take place. May plans to put forward her thrice-rejected Brexit deal in the week beginning June 3. She makes efforts to secure an agreement before lawmakers go on summer holiday.
However, Britain’s opposition said it would not ratify the deal if a compromise agreement is not reached with the government. Those comments fuelled speculation that May will soon be ousted and pressured the pound.
The bitish currency fell 0.5% to $1.2943, its lowest since Feb 15. It also dropped 0.4% versus the common currency to 87.13 pence.
START TRADINGForex – Brexit impasse sends sterling to a 3-month low
Volatility in currency markets is historically low. In recent weeks investors have curtailed their bets on big swings in the pound.
Safe-haven currencies, the Japanese yen and Swiss franc, gained on Wednesday after weak economic data in China raised new concerns about growth in the country.
The US dollar also benefited from its safe-haven status even as the United States and China remain locked in a trade war. President Trump threatened higher tariffs on billions of dollars of Chinese imports last week. Beijing responded with planned tariff hikes of its own on Monday.
The euro weakened as Italy’s Deputy Prime Minister criticized European Union rules for the second day.
The Aussie dollar dropped to its lowest level since Jan. 3. Back then, a flash crash in the foreign exchange markets rocked major currencies.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money