Sterling plunges after Britain hints at 'hard Brexit'
[TOKYO] Sterling plunged in Asian trade on Monday on speculation Britain may be heading towards a clean break with the EU, ahead of a speech by Prime Minister Theresa May on her Brexit strategy.
The pound tumbled to US$1.1986 shortly after 3.00am (1800 GMT Sunday) Tokyo time, hitting the lowest level since the October 2016 'flash crash' in which sterling dived to a 31-year low of US$1.1841.
The British unit has since recovered some ground to sit around US$1.2044 at 9.00am (2400 GMT), still down from US$1.2197 at 1800 GMT Friday.
The pound took a hit after Britain warned it might undercut the EU economically if it cannot obtain both single market access and immigration controls.
Matching reports in several British weekly newspapers said May was prepared to accept a so-called "hard Brexit": pulling out of the single market, the European customs union and the European Court of Justice, in order to regain control of EU immigration.
"The prospect of another speech from PM May is likely to see sterling yet again on a something of a roller-coaster," Bloomberg News quoted Jeremy Stretch, head of Group-of-10 foreign-exchange strategy at Canadian Imperial Bank of Commerce, as saying in an e-mailed note.
Finance Minister Philip Hammond, in an interview with Germany's Welt am Sonntag newspaper, said Britain would be forced to "change our economic model" in order to remain competitive if it is shut out from access to the single market.
AFP
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Banking & Finance
JPMorgan talking with investors about two synthetic risk transfers
HSBC says growing Chinese wealth fuels client investments in US
Money laundering accused Su Baolin to plead guilty after being handed 3 more charges
UBS flags 'serious' concern about new Swiss capital requirements
Lloyds bank says quarterly profits sink on higher costs
US seeks 36 months’ jail for Binance founder Zhao