Sunday 4 December 2016

Sterling slides back below $1.23

Patrick Graham

Published 12/10/2016 | 07:58

Pound hovering around 90 pence to the euro market after bleak Friday
Pound hovering around 90 pence to the euro market after bleak Friday

Sterling fell back below $1.23 on Tuesday, trading down 0.6pc on day as it continued to suffer from concerns about the economic fallout of Britain's planned exit from the European Union.

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Trade-weighted sterling hit a nearly-eight-year low of 74.0 at the Bank of England's first morning print of the index, which measures the pound's broader strength.

It was also half a percent weaker at 90.51p per euro .

Some traders cited a Financial Times report that Russian bank VTB may move its European hub to Frankfurt, Paris or Vienna as having added to worries of financial sector cutbacks in London due to Brexit.

"There is nothing to go on on the data front today, but concerns surrounding our ever increasing current account deficit have reignited discussion around the widespread impact such a hole can create," said Tobias Davis, head of corporate treasury sales at Western Union in London.

"Liquidity is also a cause for concern as present, highlighted by gaps in price action."

Reuters

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