When will sterling hit rock bottom? Not yet evidently.
The pound is extending its disastrous run against the dollar and euro to a third day, setting new multiyear lows against both.
Sterling broke below $1.26 on Wednesday morning, a level not seen since 1985. Here is how the pound looks against the dollar at just after 7.50 a.m. BST (2.50 a.m. ET):
And here is how the pound looks against the euro:
Those numbers mark a fresh 31-year low against the dollar and a new 5-year low against the euro.
The pounds collapse 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.
FXTM Research Analyst Lukman Otunuga says in an email this morning: “Much attention may be directed towards the UK services data that should present a clear picture on how services have fared post-Brexit.
(Service sector PMI figures are due at 9.30 a.m BST/4.30 a.m. ET.)
“While a positive figure could potentially provide the pound a lifeline, the Brexit jitters may be bone deep consequently ensuring the Sterling remains depressed until the article 50 invoke date. Although sentiment towards the UK economy continues to be uplifted as domestic data repeatedly beats, the persistent uncertainty and unknowns over how the Brexit negotiations will take place have seriously soured investor appetite towards the Sterling.”