- Pound down 0.3% against the dollar and euro.
- The slump comes after a leaked UK government report saying that Britain will be worse-off economically under every economic scenario it has so far looked at.
LONDON – Sterling fell against the dollar and the euro on Tuesday as concerns over Brexit resurfaced.
The pound is down 0.3% to $US1.4023 against the dollar at just after 9.00 a.m. GMT (4.00 a.m. ET). It was down as much as 0.5% in earlier trade. Meanwhile, the pound is down 0.3% against the euro to €1.1331.
Part of sterling’s weakness is down to a resurgent dollar but Connor Campbell, a market analyst with SpreadEx, said in an email on Tuesday morning: “A lot of the currency’s weakness stems from the week’s early focus on Brexit, and the innumerable issues attached.
“Yesterday it was all about Theresa May’s shaky position atop the Tory party and the UK’s lack of ability to secure an EU divorce bill. Today, however, investors are concerned about a leaked cabinet report highlighting the myriad ways Brexit will be bad for the UK economy, regardless of whether Britain comes out the other side with a wide-ranging free trade deal, single market access or no deal at all.”
BuzzFeed News obtained a highly classified cabinet briefing, prepared by the civil service, that shows the UK economy is expected to be worse off under every Brexit scenario it has so far looked at.
Neil Wilson, an analyst with ETX Capital, said in an email: “Renewed concerns about Brexit that are hitting sterling. The EU seems to dictating terms on the transition to the British government in a manner that has angered hardline Brexiters, risking a rift in the ruling Conservative party. May’s premiership looks shaky at best.
“Meanwhile the British continue to vacillate, meaning any deal is taking longer than it ought to take, risking the chance that the lack of clarity leaves businesses invoking their worst-case scenario plans. “
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