Sterling is diving against the dollar again on Thursday lunchtime in London.
Here’s how the pound looks at 12.30 p.m. BST (7.30 a.m. ET):
As you can see, the currency slumped sharply around 11.30 a.m. BST. The fall appears to be more about the dollar’s strength than the pound’s weakness.
FXTM Research Analyst Lukman Otunuga says in an email this morning: “Dollar bulls received ample encouragement on Wednesday following the upbeat U.S services sector data which revived hopes over the Federal Reserve raising US interest rates in December.”
However, the pound is also falling against the euro, suggesting fears over what a “Hard Brexit” means for the economy persist. Here’s how sterling looks against the euro at 12.20 p.m. BST (7.20 a.m. ET):
The pound has had a torrid week, down almost 2% against the dollar so far. Sterling’s fall began after Prime Minister Theresa May on Sunday set a firm date for triggering Article 50, which would begin the official process of Britain leaving the European Union.
Things have not been helped by reports that Theresa May is unwilling to bend to the will of financial services in negotiations, signals that a “hard Brexit” — a complete break from Europe — is the most likely outcome, and an estimate that such a departure would cost the UK £10 billion in lost taxes.