Tue 03 September 2019:
The pound hit a two-and-half-year low Tuesday after British Prime Minister Boris Johnson threatened to call a snap election to push through Brexit, while Asian markets were hobbled by worries over China-US trade talks.
Johnson’s warning that he will call a poll for October 14 if rebel MPs in his Conservative party vote to force another delay to Brexit raised the possibility of an extended period of uncertainty in Britain, where the economy is already struggling.
“We are leaving on October 31, no ifs or buts,” he said in a statement outside 10 Downing Street.
Sterling sank around one percent against the greenback Monday, with weak factory figures adding to the sell-off, and on Tuesday dropped below $1.20 for the first time since January 2017.
The euro was also sitting around levels not since since the second half of the same year as investors prepare for a huge day in Westminster with anti-Brexiteers planning to hold their vote on their return from the summer break.
“The continued political uncertainty will do nothing to lift sterling from its torpor,” said Neil Wilson, chief market analyst at Markets.com.
“There is more downside risk and very little to give bulls encouragement… we are very much in uncharted waters here. We could feasibly see $1.15 or even $1.10 in the coming weeks if traders decide to move against the pound.”
The China-US trade impasse was playing on equity investors.
While Donald Trump has said top-level negotiations between the world’s top two economies would take place soon, a report said they were having trouble agreeing a schedule for any meeting.
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