Sterling shrinks as Brexit deal slowly getting out of the picture
As Oct. 31 draws nearer, a Brexit-deal is becoming more improbable and it is starting to take its toll on the financial markets as sterling tumbled on Wednesday.
Sterling dropped by 0.5% to $1.2762, lower from its highest rate of $1.2877 in six months.
“Trading the British pound intra-day at the moment is not for the faint-hearted, with deep pockets required,” Jeffrey Halley, a market analyst at OANDA said.
“The street clearly wants to take GBP higher on any Brexit hope, but traders should be aware that the pullback will be equally as ugly if progress stalls or collapses yet again,” he added.
Meanwhile, Asian markets had its fair share of downfalls as South Korea, Australia, and New Zealand yielded negative indices.
In the European markets, Euro Stoxx 50 futures fell 0.4%, German DAX futures were also down 0.3%.
“It looks like the trade war has claimed yet another victim, in addition to diminished businesses confidence and reduced investment spending, as consumers are starting to chicken out,” said Chris Rupkey, an economist at MUFG Union Bank.