FX round-up: Traders jittery as pound nears post-Brexit slows
By Alexander Bueso
Date: Wednesday 17 Jul 2019
(Sharecast News) - The possibility of a further sharp drop in the pound was brought into sharp focus on Wednesday as Sterling's slide deepened, taking it closer to the lows plumbed more than two years back in the aftermath of the referendum on Brexit.
And according to Morgan Stanley's Hans Redecker, if the UK's next Prime Minister pursued a tougher negotiating stance vis-a-vis Brussels, then cable could fall to the $1.10-$1.20 range, or $1.0-$1.10 in case of a so-called 'hard Brexit', Bloomberg reported.
Sterling had only ever traded below the $1.10 mark once, in 1985, after Washington devalued the Greenback.
And amid reports of various possible plans to suspend Parliament ahead of the 31 October Brexit deadline, later on Wednesday, the House of Lords was set to vote on potential measures to potentially head-off that risk.
In the background, cable was 0.18% higher to 1.24290 - having earlier dropped as low as 1.2382 - while against the single currency the pound was ahead by 0.02% to 1.1070.
Earlier, Chancellor Philip Hammond reportedly labelled the suggestion by Jacob Rees-Mogg and fellow Brexiters that Britain would in fact be better off with no deal as "terrifying".
Meanwhile, euro/dollar was 0.17% higher to 1.12290 as the International Monetary Fund's research director, Gita Golpinath, highlighted the still excessive current account surpluses being run by Germany and the Netherlands, even as China's had come down rapidly.
On the flip-side, Golpinath said the excessive current account deficits were concentrated in the UK, the US and some emerging market economies such as Argentina and Indonesia.
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