AFP, Tokyo :
Sterling dropped Monday on reports Britain may be headed for a clean break with the EU, a so-called “hard Brexit”, just ahead of a key speech by Prime Minister Theresa May.
The pound tumbled to $1.1986 shortly after 3:00am (1800 GMT Sunday) Tokyo time, hitting its lowest level since the October 2016 ‘flash crash’ when sterling briefly dived to a 31-year low of $1.1841.
Britain’s currency has since recovered some ground to sit around $1.2030 at 11:00am (0200 GMT), still down from $1.2197 Friday.
The euro also rose against sterling, buying 87.87 pence briefly Monday, its highest since November, against 87.15 pence on Friday.
The pound took a hit after weekend reports fuelled worries about Britain’s exit from the European Union.
Matching stories 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 reports came ahead of a speech Tuesday in which May is to set out how Britain would handle its divorce from the EU.
“The weekend reports were undoubtedly the factor that pushed the pound down,” said Nomura forex strategist Yoshitaka Suda.
Sterling dropped Monday on reports Britain may be headed for a clean break with the EU, a so-called “hard Brexit”, just ahead of a key speech by Prime Minister Theresa May.
The pound tumbled to $1.1986 shortly after 3:00am (1800 GMT Sunday) Tokyo time, hitting its lowest level since the October 2016 ‘flash crash’ when sterling briefly dived to a 31-year low of $1.1841.
Britain’s currency has since recovered some ground to sit around $1.2030 at 11:00am (0200 GMT), still down from $1.2197 Friday.
The euro also rose against sterling, buying 87.87 pence briefly Monday, its highest since November, against 87.15 pence on Friday.
The pound took a hit after weekend reports fuelled worries about Britain’s exit from the European Union.
Matching stories 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 reports came ahead of a speech Tuesday in which May is to set out how Britain would handle its divorce from the EU.
“The weekend reports were undoubtedly the factor that pushed the pound down,” said Nomura forex strategist Yoshitaka Suda.
