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How is the no-deal Brexit worry affecting the Sterling?

Grace A


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The pound sterling fell to a six-month low against the greenback and the euro on Tuesday after the leading contenders vying for the post of UK prime minister reignited fears of a no-deal Brexit in a late-night debate on Monday.

The two frontrunners; Jeremy Hunt and Boris Johnson said on Monday that they would not accept the European Union’s demand for a Northern Irish backstop as part of the Brexit deal, a key element designed to prevent a hard border between EU member Republic of Ireland and Britain’s Northern Ireland.

At 3:30 pm GMT on Tuesday, the sterling slipped to $1.24004, its lowest conversion rate since 3rd January and is within striking distance of the April 2017 lows. Likewise, the GBPEUR pair fell about 0.5% and was seen trading at more than six-month lows of 1.10647 versus the euro.

With business confidence falling for five straight quarters and the manufacturing sector contracting for two months in a row, UK’s unemployment and the wage growth data announced earlier today comes as a sigh of relief for a country gripped in Brexit uncertainty.

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