Sterling extends losses as Brexit impasse prevails
Sterling fell today for a second day in a row, as investors waited for parliament’s next step to break the Brexit impasse and opposition leaders gathered to discuss tactics.
The European Union’s Brexit negotiator, Michel Barnier, said Britain had yet to provide “legal and operational” proposals for an agreement on exiting the bloc at the October 31 deadline.
The UK Supreme Court dealt Prime Minister Boris Johnson a blow earlier this week when it ruled he had unlawfully suspended parliament.
The ruling reinforced belief that Britain was unlikely to leave the EU without a deal on October 31, but parliament remains split, early elections look inevitable and Johnson remains adamant
Those fears eliminated all sterling’s gains since the Supreme Court ruling, for its biggest one-day fall against the dollar in two weeks.
It had slipped 0.1% to $1.235 this evening, while it was also down 0.1% against the euro at 88.5 pence.
“We don’t know where things will go with Brexit. That’s being manifested in sterling more than any other asset,” said Fahad Kamal, chief market strategist at Kleinwort Hambros.
“What we have done in the face of unknowable political outcomes and daily volatility is to make sure our portfolios can deal with any big moves, big rallies or big falls,” he added.
British opposition Labour leader Jeremy Corbyn will meet other opposition leaders later today, as they discuss how to stop Johnson from quitting the EU on October 31 if he fails to secure a deal with Brussels by October 19.
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