Rolling coverage of business, economics and markets as sterling hits new 28-month low against the US dollar
Oh, to be a fly on the wall in 10 Downing Street today as they discuss a fall in sterling at peak holiday season.
Perhaps, counterintuitively, Boris Johnson and his new strategy supremo, Dominic Cummings, may welcome the fall (or what it represents), says Craig Erlam, senior market analyst at foreign exchange firm Oanda.
The weakness in the pound is a reflection of the fact that Boris Johnson’s plan is working. He wants his no-deal threats to be taken seriously by the EU in the hope that it forces them to re-engage on the backstop. Clearly he has traders convinced.
Ultimately, May failed to convince anyone that no-deal was ever an option, despite repeated warnings that it was better than a bad deal. Boris Johnson is determined not to make the same mistake and it now remains to be seen whether the EU will take his threats as seriously as the market is. Traders are currently not optimistic but it’s still early days. For now, the currency may remain under severe pressure.
The FTSE 100 is the one gainer among major European stock markets, still up by 0.14%.
Elsewhere Germany’s Dax index has been shaken by poor earnings from the Lufthansa airline and chemicals company Bayer. It fell by 0.5%.
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