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| Version 2 | Version 3 |
|---|---|
| EU referendum: Pound sees biggest fall in a year on Brexit fears | EU referendum: Pound sees biggest fall in a year on Brexit fears |
| (about 1 hour later) | |
| The pound has seen its biggest drop in more than a year against the dollar over uncertainty about a possible British exit from the European Union. | The pound has seen its biggest drop in more than a year against the dollar over uncertainty about a possible British exit from the European Union. |
| In early trading in London, the pound fell 1.65% to $1.41670, the biggest one-day drop since January 2, 2015. | In early trading in London, the pound fell 1.65% to $1.41670, the biggest one-day drop since January 2, 2015. |
| It comes after London Mayor Boris Johnson joined the campaign to leave the EU following Prime Minister David Cameron setting a June referendum date. | It comes after London Mayor Boris Johnson joined the campaign to leave the EU following Prime Minister David Cameron setting a June referendum date. |
| The fall adds to losses made by the pound over recent months. | The fall adds to losses made by the pound over recent months. |
| 'Sensitive' | 'Sensitive' |
| So far this year, fears of a British exit from the EU - dubbed 'Brexit' - have already pushed the pound down by 3.9% against the US dollar. Analysts said that was likely to continue to direct sentiment until the vote. | So far this year, fears of a British exit from the EU - dubbed 'Brexit' - have already pushed the pound down by 3.9% against the US dollar. Analysts said that was likely to continue to direct sentiment until the vote. |
| "With political reaction to Friday's deal looking more mixed than the prime minister would have hoped for, in the short term it is likely that the exchange rate will be sensitive to news which is seen to increase the probability of Brexit," said Sam Hill, senior UK economist at RBC Capital Markets. | "With political reaction to Friday's deal looking more mixed than the prime minister would have hoped for, in the short term it is likely that the exchange rate will be sensitive to news which is seen to increase the probability of Brexit," said Sam Hill, senior UK economist at RBC Capital Markets. |
| Against the yen, the pound slumped to 160.175 yen, its lowest since November 2013. Against the euro, it was down 1.2% to €1.27780. | |
| "I don't think investors are saying Brexit is good or bad, but it's the uncertainty," said Simon Smith, chief economist at FxPro. | "I don't think investors are saying Brexit is good or bad, but it's the uncertainty," said Simon Smith, chief economist at FxPro. |
| The pound has already dropped more than 17% against the dollar in the last 18 months, partly due to the UK's low interest rates. | |
| Whereas the US raised rates last year, Bank of England governor Mark Carney has ruled out such a rise for now. | |
| As a result sterling is seen as less attractive for investors, continuing to fall from the $1.7165 peak seen on 1 July, 2014. | |
| 'Down the lift shaft' | 'Down the lift shaft' |
| The prime minister announced on Saturday that the EU referendum would be held on 23 June after he came back from Brussels with a renegotiation of Britain's EU membership. | The prime minister announced on Saturday that the EU referendum would be held on 23 June after he came back from Brussels with a renegotiation of Britain's EU membership. |
| According to Mr Smith, the pound went "up the escalators" on Friday and "down the lift-shaft at the start of the Asia session" after the weekend's events. | According to Mr Smith, the pound went "up the escalators" on Friday and "down the lift-shaft at the start of the Asia session" after the weekend's events. |
| Mr Johnson's intervention is being seen as a significant blow to Mr Cameron's campaign to remain in the EU. | |
| Several other senior Conservatives - including Justice Secretary Michael Gove - have already said they would join the Out campaign. | Several other senior Conservatives - including Justice Secretary Michael Gove - have already said they would join the Out campaign. |