Brexit impact: Pound falls to 31-year-low against the US dollar

Josh Kim
October 5, 2016

The MEP said EU-British ties "must remain close", adding that it was "especially" important for the 48 percent of Britons who voted to remain in the EU in Britain's referendum on June 23.

That's its lowest level since June 1985, when Margaret Thatcher was British prime minister and London was readying for Live Aid.

Just days before the European Union referendum the pound was worth more than $1.50 but it plummeted to $1.32 overnight when Brexit became clear.

The "whipping-boy" pound sank to a 31-year low against the dollar today as traders raised their bets against sterling amid heightened fears of a "hard Brexit".

The FTSE 100 charged up 0.7% to 7,031.07.

The two will meet on the sidelines of the European Union summit in Brussels in two weeks, but, he insisted there will be no negotiations with Britain ahead of the formal triggering of Article 50.

Jameel Ahmad, vice president of market research at FXTM, said sterling could end up trading between 1.20 and 1.25 against the U.S. dollar by year-end.

A Downing Street spokeswoman declined to comment on sterling's fall. And the money they make overseas will be worth more when it is brought back to the headquarters in the United Kingdom.

For more than three months since the referendum, she has said little about how she will deliver the vote of the British people. On Monday, the September purchasing managers index for manufacturing came in at 55.4, its highest level in two years.

"This idea that we hold the cards and that the European Union is going to come to us and say "you know what, we'll give you pretty much what you want"... is rubbish".

Kit Juckes, a strategist at Societe Generale, said that May appears to be treating immigration as "the hardest of lines".

The dollar strengthened against a basket of currencies on a private report that showed the US manufacturing sector returned to expansion territory in September.

It's not just the big exporters seeing a rise in their shares this week.

"The message was clear from at least some of those present [at the meeting]: if Theresa May can not provide some early clarity about where the negotiations will end up, the only way to avoid that uncertainty would be a move towards Europe - there will not be time to wait", a source told The Telegraph in late September.

Meanwhile, the pound's fall means that the FTSE's rally higher hasn't been all good news for investors abroad.The FTSE is up by 12% since the June 23 referendum, but the decline in sterling means the index is still down by 2.9% in USA dollar terms over the same period.

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