Pound slumps against euro, dollar

NEW YORK, United States — The British pound slumped to a fresh three-year low against the euro Monday and edged lower on the dollar, as signs of weakness mounted in the British economy.

At 86.80 pence on the euro, the pound was at its weakest level since August 2013.

Meanwhile sterling fell to $1.2883, just barely above its $1.2798 post-Brexit vote level that marked a three-decade low against the US greenback.

The currency’s fall came as data from Britain showed London residential rents fell for the first time in six years in July, amid worries the June 23 vote to exit the European Union was already having an impact on the economy.

The rental data came on the heels of numbers showing home prices fell for the second straight month.

“In the month of August, the British pound has been the weakest currency and the trend continued today,” said Kathy Lien of BK Asset Management.

“The main reason why the currency is weak is because investors are worried about this week’s UK economic reports.”

Even if the formal moves to leave the European Union will not be taken by the government until next year, Lien said, “the damage has been done and consequences are just beginning to appear.”

source: business.inquirer.net

Pound sinks below $1.30 on Brexit jitters

NEW YORK, United States — The pound sank below $1.30 on Wednesday as growing worries about Britain’s vote to leave the European Union pushed investors toward safe haven assets.

“Sterling hit fresh lows against all of the major currencies and while there was no news to explain the move, the sharp sell-off sent fresh jitters across the financial markets, driving investors into the safety of the US dollar, Japanese yen and gold,” said Kathy Lien of BK Asset Management.

The pound sank to $1.2798 at one point, its lowest level since June 1985, before recovering somewhat. The British currency dropped 1.0 percent against the euro at 85.88 pence.

The euro strengthened slightly against the dollar, up 0.2 percent at $1.1097.

“The eurozone is hardly sheltered from the UK’s troubles and there could be a banking sector crisis brewing in Italy but for now, the greater concern is clearly Britain,” Lien said in a client note.

The dollar was little moved by the minutes of the Federal Reserve’s June 14-15 policy meeting, which showed Fed officials divided over US growth prospects as they kept rates on hold.

Omer Esiner of Commonwealth Foreign Exchange said the dollar stands to benefit from continued aversion to risk, but that the outlook for the Fed leaving rates unchanged through 2016 was likely to keep its upside limited.

“Even upcoming economic data, like the all-important payrolls report for June this Friday, may have a limited impact on the dollar as the Brexit story continues to dominate market focus,” he said.

source: business.inquirer.net