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Pound suffers again on Brexit worries; yen slips

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The British pound took another hit Wednesday as worries that the country will vote to exit the European Union persisted.

[NEW YORK] The British pound took another hit Wednesday as worries that the country will vote to exit the European Union persisted.

The pound dropped below the US$1.39 line, its lowest since late 2009, before pulling up slightly to US$1.3923, for a loss of 0.7 per cent in the day.

The euro rose to 79.05 pence, a 0.6 per cent gain.

The International Monetary Fund said in a report about the British economy Wednesday that the specter of "Brexit" could hurt growth.

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Phil McHugh, at trading group Currencies Direct, said broader worries were also hurting sterling.

"Unsurprisingly, the concerns for the global economy have continued to have disastrous consequences for the pound, which often performs poorly in a risk-off environment," he said.

Other major currency pairs traded within range ahead of the Friday-Saturday meeting of the finance chiefs of the Group of 20 powers, where ways to stimulate growth and avoid currency wars were on the top of the agenda.

The IMF also warned Wednesday in a report prepared for the Shanghai meeting that the world economy is "highly vulnerable" and that countries needed to do more to boost global demand.

Despite the worries, the yen, the favoured safe haven of recent weeks, erased early gains to end the day little-changed. At 2200 GMT the Japanese currency was at 112.15 to the dollar and 123.46 to the euro.

AFP

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