British pound slumps to 3-month low on ‘no-deal Brexit’ fears


It’s back.

Despite repeated parliamentary votes to rule out the prospect of the U.K. leaving the European Union without a deal in place to govern its relationship with the bloc, the revived threat of a “no-deal” Brexit put renewed pressure on the British pound on Thursday.

Sterling changed hands at $1.2797 versus the U.S. dollar












GBPUSD, -0.3814%










 in recent trade, near its lowest since Feb. 18 and leaving the currency on track for a 1.6% weekly slide.

British Prime Minister Theresa May is expected to again attempt to push her Brexit plan through the House of Commons in early June. Versions of her plan have faced multiple rejections. Lawmakers have also rejected the prospect of a no-deal Brexit, but such a scenario still can’t be ruled out.

Brexit Brief: Make-or-break moment for May’s leadership as U.K. approaches vote on deal

“Another failure will almost certainly mean Theresa May is out. The big question then is who will take her place?” said Jasper Lawler, head of research at London Capital Group “Pound traders are growing increasingly nervous that Theresa May will be replaced with a hard-line Brexiteer. This means the chances of a softer Brexit are fading and dragging the pound lower.”

The U.S. dollar, meanwhile, was mostly higher versus major rivals in slow trade. The ICE U.S. Dollar Index












DXY, +0.21%










a measure of the currency against a basket of six major rivals, was up 0.1% at 97.689.

The euro












EURUSD, -0.2142%










 fetched $1.1186, down from its late Wednesday level of $1.1204. The Against the Japanese yen, one U.S. dollar bought ¥109.86, up from ¥109.59.

The dollar remained largely positive after a round of economic data, including a rise in the Philadelphia Fed’s May manufacturing index to a four-month high, a fall in first-time U.S. jobless claims and a rise in April housing starts.

Want news about Europe delivered to your inbox? Subscribe to MarketWatch’s free Europe Daily newsletter. Sign up here.



Source link