British Pound Plunges to Record Low Ahead of Brexit Vote

160624_INV_PoundBrexitA 5-pound (bottom) and a 5-euro bill are held up in London, Britain, 24 June 2016.
  • British Pound Plunges to Record Low Ahead of Brexit Vote

The British pound plunged to a record-low on Monday ahead of Tuesday’s parliamentary vote in the United Kingdom.

UK Prime Minister Theresa May announced she will go ahead with the vote despite the majority of the MPs, not in support of the draft Brexit deal.

The uncertainty surrounding the deal plunged the pound across the board, falling to 1.2506 against the U.S dollar. The lowest since April 2017.

The British parliament will on Tuesday vote to approve or disapprove draft exit agreement with the European Union to finally commence official withdrawal from the union.

“Until the market knows what will happen with respect to Brexit one way or the other then they [traders] will remain extremely anxious,” said Jane Foley, head of foreign exchange strategy at Rabobank.

Ms Foley said the threat of a hard Brexit, under which the UK leaves the EU without a deal, as well as the continuing political uncertainty was “an extraordinary and toxic mix” for the pound.

“Once we know what is happening, things will be more settled,” she added.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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