Pound sterling falls to new low against the dollar in Asia trade

The pound hit another new low as the euro also fell as the yen strengthened

Chikako Mogi,Narayanan Somasundaram
Wednesday 06 July 2016 09:18
Comments
 The pound is continuing its slide as a result of anxiety over the economic implications of Brexit
The pound is continuing its slide as a result of anxiety over the economic implications of Brexit

The pound sank to a fresh 31-year low as Britain’s vote last month to leave the European Union sent investors seeking haven assets, boosting the yen and pushing global bond yields to record lows.

The British currency breached lows reached in the immediate aftermath of the UK’s June 23 referendum, while Japan’s currency climbed at least 0.6 per cent against all 16 of its major counterparts.

M&G Investments suspended a £4.4 billion real-estate fund on Tuesday, following on the heels of Aviva Investors and Standard Life Investments after a flurry of redemption requests.

The pound continues to slide against the dollar after Brexit

The 10-year US Treasury yield fell to a record, while yields on longer-dated Japanese government bonds sank to unprecedented levels.

“There is little to stop the pound’s slide in the near term,” said Peter Dragicevich, a foreign-exchange strategist at Commonwealth Bank of Australia in London.

“History shows that broad-based downward adjustments in the currency are pronounced and drawn out.”

Carney: We have a clear plan

The pound declined 0.9 per cent to $1.2930 as of 8:11am in London on Wednesday, after reaching a 31-year low of $1.2798. The yen rose 0.6 per cent against the dollar to 101.10, after climbing to 100.58, its highest since June 24. It gained 0.8 per cent on Tuesday.

The euro fell 0.2 per cent to $1.1050.

Japan’s Topix index of shares fell 2 per cent as risk aversion torpedoed Asian equity markets.

Japanese Prime Minister Shinzo Abe said on June 28 that the government will carefully watch currency movements, and that he asked Bank of Japan Governor Haruhiko Kuroda to co-operate with Group-of-Seven nations to secure market liquidity.

“The yen strengthened in anticipation of further declines in Japanese stocks,” said Toshiya Yamauchi at Ueda Harlow Ltd., a margin-trading services provider in Tokyo. “Risks to further upside in the yen are growing and it may test the 100 level to see how the authorities respond.”

© 2016 Bloomberg

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in