Reuters logo
FOREX-Sterling hit by 'Brexit' worries, others major currencies calm
February 21, 2016 / 9:57 PM / 2 years ago

FOREX-Sterling hit by 'Brexit' worries, others major currencies calm

* Sterling reverses Friday’s gains

* London mayor supports campaign for Britain to exit EU

* Other major currencies more subdued

By Ian Chua

SYDNEY, Feb 22 (Reuters) - Sterling fell in Asia early on Monday as concern grew that Britain would quit the European Union, after London Mayor Boris Johnson threw his weight behind the exit campaign. The dollar, euro and yen were little changed.

The pound fell around 1 percent against the dollar, euro and yen. It slid as far as $1.4235 and 160.07 yen from around $1.4405 and 162.10 late on Friday. The euro popped back above 78.00 pence and last stood at 77.85.

Sterling has just about reversed gains made on Friday after EU leaders agreed unanimously on a package of measures aimed at keeping Britain in the 28-nation bloc.

But Johnson said on Sunday that Prime Minister David Cameron had failed to deliver fundamental reform with the agreement and that he would advocate Britain leave the EU. His stance could increase the chances Britons will vote against EU membership in a June referendum.

“Political uncertainty generated by the UK referendum will weigh on GBP,” said Elias Haddad, currency strategist at Commonwealth Bank.

The other major currencies were steadier. The dollar was a touch softer at 112.50 yen, as was the euro at 124.97 . The euro also weakened against the dollar, to $1.1112.

Dollar bulls shrugged off data last Friday that showed underlying U.S. consumer price inflation accelerated in January by the most in more than four years.

The figures should support the view that the Fed will gradually raise interest rates this year as forecast, but markets remained sceptical, given slowing global growth and market turbulence.

G20 finance ministers and central bank governors gather in Shanghai this week to discuss the global uncertainty. Their focus should be on global economic spillovers from their policy decisions, said Christine Lagarde, the managing director of the International Monetary Fund.

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below