STERLING remained under pressure on the foreign exchanges yesterday, as fears of a no-deal Brexit continued to weigh.
The pound, which has tumbled to 13-month lows against the US greenback, was at 5pm in London trading around $1.2756, down a further 0.12 cents from its pre-weekend close.
David Madden, analyst at CMC Markets, said: “Sterling remains in the downward trend that began [in] April and, if the negative move continues, it could target $1.2590.”
Sterling fell by more than 2.5 cents against the dollar last week, with comments from International Trade Secretary Liam Fox about there being a 60-40 chance of a no-deal Brexit weighing heavily on the pound.
Sterling is well adrift of the near-$1.50 levels at which it traded on June 23, 2016, ahead of the European Union referendum result.
Earlier this month, Bank of England Governor Mark Carney warned the risks of a no-deal Brexit were “uncomfortably high”.
Currency analysts are warning that a no-deal Brexit, where the UK leaves the EU without reaching agreement over its future relationship with the bloc on trade and other key issues, is likely to prompt a further plunge in the pound.
Sterling dipped marginally against the euro yesterday. The single currency had come under pressure on Friday as the beleaguered Turkish lira plunged. Worries over some European banks’ exposure to the Turkish currency weighed on the euro ahead of the weekend.
Concerns over the Turkish lira’s woes remained at the forefront of currency traders’ minds.
The euro was, at 5pm in London yesterday, trading around 89.37p. It had closed at 89.33p ahead of the weekend.
Mr Madden noted the euro had “bounced back after printing a fresh one-year low in the early hours of trading”.
He added: “Bargain-hunters stepped in after the Turkish lira stabilised in the wake of the Turkish central bank liquidity injection. The eurozone is exposed to Turkey and, should the lira take another knock, the euro is likely to suffer.”
The Turkish lira, which has plummeted this year, has been hit hard by worsening relations with the US.
It has also been weighed down by worries over Turkish President Recep Tayyip Erdogan’s influence on monetary policy.
US President Donald Trump pledged on Friday to hike tariffs on Turkish steel and aluminium.
Last Wednesday, on the back of sterling’s woes, the euro rose above 90p for the first time last autumn.
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