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Sterling hits 23-month low vs euro as no-deal Brexit worries grow

LONDON: Sterling plunged to a 23-month low against the euro and near a 31-month low versus the dollar on Monday as fears

Aug 05 2019

LONDON: Sterling plunged to a 23-month low against the euro and near a 31-month low versus the dollar on Monday as fears of a disorderly Brexit grew.

After the by-election victory for the Liberal Democrats in Brecon and Radnorshire last week, the Conservative party has been left with a majority of just one seat in parliament, making it harder for the Tories to pass any Brexit-related decisions and therefore heightening uncertainty.

The election also highlighted the need for collaboration between the Tories and Brexit Party, compounding the risk of a no-deal Brexit, analysts say.

The pound fell to 92 pence against the euro, its lowest since early September 2017, and was last down by 0.6% at 91.88 pence. Versus the dollar, the pound was down 0.3% at $1.2121, not far from last week's low of $1.2080.

"The pound looks set to remain under pressure for now," said Craig Erlam, an analyst at Oanda.

"There's plenty of UK data out this week, starting with the July Services PMI today and ending with second quarter growth data on Friday. Unfortunately, I fear anyone hoping for some reprieve from the data this week may be disappointed," Erlam said.

Economists polled by Reuters expect the July UK services purchasing managers' index, due at 0830 GMT, to remain at 50.2 unchanged from June.

Copyright Reuters, 2019