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Sterling falls for second day as Britain races towards no-deal Brexit

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Sterling falls for second day as Britain races towards no-deal Brexit
Demonstrators hold placards as they protest outside of Downing Street in London on August 28, 2019. - British Prime Minister Boris Johnson sparked fury Wednesday among pro-Europeans and MPs opposed to a no-deal Brexit by forcing the suspension of parliament weeks before Britain's EU departure date. The pound slid on the surprise news, which opponents branded a "coup" and a "declaration of war" but Johnson claimed was necessary to allow him to pursue a "bold and ambitious" new domestic legislative agenda. (Photo by DANIEL SORABJI / AFP) (Photo credit should read DANIEL SORABJI/AFP/Getty Images)

Sterling has continued to fall this morning a day after it lost 0.55 per cent against the dollar as the UK took a big step closer to a no-deal Brexit.

Read more: Sterling could hit 35-year low on no-deal Brexit worries, warn City economists

The pound was 0.16 per cent lower against the dollar this morning, buying $1.219. It had also fallen 0.16 per cent against the single currency to buy €1.101. 

It was still a way off recent lows however, having climbed over one per cent against the dollar between Saturday and Tuesday after Prime Minister Boris Johnson met European Union leaders at the G7 summit in France.

Johnson’s decision, made yesterday, to suspend parliament between the second week in September and 14 October rattled traders’ nerves once again, sparking a sharp sell off.

His critics vociferously attacked the move as a cynical attempt to stop MPs from preventing a no-deal Brexit. The PM defended his decision as a regular occurrence that let him introduce a new agenda via a Queen’s Speech in the middle of October.

This morning, Remainer MPs fast-tracked plans to prevent no deal. Former chancellor Philip Hammond said MPs would now have to move next week, when they return after the summer recess.

For the pound, “next week will be critical,” said Marios Hadjikyriacos of online broker XM.  

“For sterling to breathe some life again, markets would need to see opposition parties move quickly towards organizing a no-confidence vote to bring down the government, or towards drafting legislation that blocks a no-deal Brexit.”

Read more: Remainers fast-track secret plans to stop PM’s Halloween Brexit

“Otherwise, market fears of a chaotic exit could intensify even further, reinforcing the pound’s negative outlook.”

(Image credit: Getty)