The pound is suffering

The pound is back below $1.22 on Friday, with no let up in sight for sterling.

After rising against the dollar on Thursday, the pound is falling again against both the dollar and the euro in early trade, extending sterling’s dreadful run for yet another day.

Here’s how it looks against the greenback at around 7.15 a.m. BST (2.15 a.m. ET):

And here’s how it looks against the euro:

Sterling’s fall against the dollar appears to be more about the greenback’s strength than any specific weakness for the pound. Reuters reports that the dollar index rose 0.3% overnight amid revived talk of a December interest rate hike from the US Federal Reserve.

But there is still a deep, lingering fear among traders about Brexit and just what form it will take. Just look at currency traders’ reaction to Brexit Minister David Davis speaking on Wednesday.

Michael Hewson, chief market analyst at CMC Markets, says in an emailed statement: “[The pound] continues to hold above the 1.2100 level [against the dollar] in the last few days, and this needs to hold for a retest of the 1.2500 level. A break below the 1.2000 area has the potential to open up the previous flash crash lows at 1.1950, and possibly lower.”

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