Sterling Sinks To A Two-Year Low

GBP: Sterling fell to a new two-year low yesterday due to the growing chance that new Prime Minister Boris Johnson could trigger a chaotic UK exit from the EU which sent the currency tumbling.

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….The Pound fell to levels not touched since mid-March 2017 in the aftermath of the triggering of Article 50 as investors repriced the chances of a disruptive exit from the EU.

Foreign Secretary Dominic Raab said the UK is “turbo-charging” it’s no-deal Brexit preparations in time for 31 October.

He said that any deal between the UK and the EU must not include the “undemocratic” so-called Irish backstop which had been a sticking point in former Prime Minister Theresa May’s Brexit deal.

May’s deal was rejected three times, fearing the arrangement would tie the UK into a customs union with the EU for an indefinite period of time.

Downing Street added to the air of pessimism when it said Boris Johnson would not meet EU leaders to discuss a revised deal unless they accepted his preconditions: that the withdrawal treaty be reopened and the controversial Irish backstop scrapped.

Raab’s comments follow Michael Gove saying the government was “operating on the assumption” that the UK would leave without a deal on Halloween.

Gove said that there would be “no ifs, no buts, no more delay” about quitting the bloc regardless of whether the UK has a deal or not.

Following Johnson’s election victory last week, EU Brexit negotiator Michel Barnier indicated he would not abandon the bloc’s red lines in negotiations so far.

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