Pound drops on Brexit fears
Sterling plummeted yesterday, driving the US dollar up, after British Prime Minister Theresa May said the EU must supply an alternative Brexit proposal, saying talks had reached an impasse after bloc leaders rejected her plans without fully explaining why.
The pound was down 1.5pc, set for its biggest daily loss since June 2017. The dollar rose on the back of the pound's move, rebounding from early lows, but was still on track for its biggest weekly drop since February as stronger equity markets and rising bond yields fuelled a rush to buy riskier assets. At a summit in Austria on Thursday, EU leaders said they would push for a Brexit deal next month but rejected May's 'Chequers plan', saying she needed to give ground on trade and arrangements for the Border with Ireland.
"Sterling bears are out in full force. They've pushed the pound quite aggressively down," said Dean Popplewell, a currency strategist at Oanda, "and it looks like they want to push things further."