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Sterling slides to three-month low in Asia on Brexit concerns
[SYDNEY] Sterling slumped to three-month lows in thin Asian trade on Monday with investors again concerned by media reports that the British government is prepared to make a "hard" exit from the European Union.
The pound sank 1.6 per cent to as low as US$1.1983, depths not seen since the flash crash of early October, having finished around US$1.2175 in New York on Friday.
The euro was quoted up 1.1 per cent at 0.8837 pounds , while sterling fell 1.8 per cent on the safe-haven yen to 136.95 yen. The Japanese currency gained broadly, with the US dollar dipping to 114.28 yen.
Dealers said the market was reacting in part to a report in The Sunday Times newspaper that British Prime Minister Theresa May will this week signal plans for a "hard Brexit" by saying she's willing to quit the European Union's single market to regain control of Britain's borders.
Markets have been worried such a decisive break from the single market would hurt British exports and drive foreign investment out of the country.
Ms May intends to launch by the end of March the formal process of negotiating the terms of Britain's exit from the EU, but has so far given very little away about what deal she will be seeking, frustrating some investors, businesses and lawmakers.
Ms May's speech on Tuesday will stress the need for Britons, who voted for Brexit by 52 to 48 per cent in last June's referendum, to unite around common goals such as protecting and enhancing workers' rights.