The Pound saw last week’s troubles worsen on Monday, with the sterling index falling to its lowest level since January 2009 as Brexit worries continue to weigh.
The Pound fell a further 0.38 percent against the dollar and 0.12 percent against the Euro on Monday morning, after hitting its lowest level against the dollar since 1985 on Friday. It spiralled downward last week after Theresa May’s speech at the Conservative party conference sparked worries that Britain was heading towards a ‘Hard Brexit’.
Chris Turner, head of currency strategy at ING, commented:
“‘Hard’ Brexit fears are unlikely to abate anytime soon and in the near term there is scope for another 2-3 percent risk premium to be built into sterling/dollar and euro/sterling.”
British bank HSBC also sees the near-term outlook of the Pound as negative, saying on Friday that the currency was likely to drop to $1.10 and reach parity against the euro by the end of 2017.
FTSE steadies despite banks and easyJet
The FTSE 100 has steadied this morning, despite a sharp drop just after market open.
Banking shares fell on Monday on concerns that Deutsche Bank CEO John Cryan may be unable to negotiate a lower fine with the US Department of Justice. UK banks followed European banking shares downwards, with Lloyds, Barclays and the Royal Bank of Scotland all falling over 2 percent. Regard banks earnings, Henry Croft, research analyst at Accendo Markets, told Reuters:
“We’re coming up to the earnings results for Q3 for most of the major banks in the UK…and that’s going to cover the large part of the post-referendum period, so it’s really going to be the first indication that we get as to the health of the banks in terms of earnings.”
Budget airline easyJet also dragged on the FTSE this morning, extending losses from last week after the group issued a profit warning. Liberum and Societe Generale issued price cuts, the former of which also cutting its rating on the stock to “sell”.