Pound dives on increased no-deal Brexit prospect
 

LONDON: The pound fell versus the dollar and euro on Wednesday as the government moved to extend the suspension of parliament, increasing the likelihood of a no-deal Brexit.Pound slid by more than one per cent against both currencies in early business, before paring the loss to nearer 0.6 per cent—still down some 3.7 per cent over three months.“The pace of sterling’s drop demonstrates yet again the currency’s susceptibility to Brexit fears,” said Han Tan, market analyst at FXTM trading group.The pound’s plunge helped London’s benchmark FTSE 100 index outperform as it features many multinationals with most of their earnings in dollars—whereas construction companies notably saw their shares take a tumble.Prime Minister Boris Johnson on Wednesday announced that the annual suspension of parliament would be extended until October 14 — just two weeks before the UK is set to leave the European Union. “Such an event would curtail attempts to block a no-deal Brexit within the UK parliament,” Tan added.The extension “certainly caught markets off-guard and came at a time when the pound had been recouping some of its (previous Brexit-fuelled) losses”, noted Craig Erlam, senior market analyst at Oanda.Fiona Cincotta at Cityindex said there was still more downside for sterling. “Any bad news from Brussels regarding Irish backstop alternatives as talks kick off over there could send the pound tanking back towards the key psychological support of $1.20,” she said.http://feeds.feedburner.com/~r/com/cwEr/~4/812byUqZzTs

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