Sterling has hit an eight-week low against the US dollar, as EU referendum worries hit the markets
The pound is sliding against other major currencies this morning, as worries about a possible Brexit take hold.
Sterling hit a two-month low against the US dollar in early trading, losing 0.5% or 0.7 of a cent to $1.4182, a drop of 0.7 of a cent.
“Ahead of the referendum, many look for sterling to underperform and the yen and Swiss franc to outperform,”
“The euro and central and eastern European currencies are vulnerable, while risk assets, in general, are expected to weaken on a Brexit victory,.”
Asian stock markets have already suffered chunky losses overnight, with Japan’s Nikkei tumbling by 3.5%.
Worries over the global economy, and Britain’s EU referendum, also sent China’s stock market down 2% and wiped almost 1% off the Australia market.
The market opened in Asia in the same spirit as it closed on Friday: equity markets were under heavy pressure losing more than 2% across the board
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Has #Brexiety reached fever pitch yet?
If the global economy does not slide towards recession, the Fed will eventually raise rates (timidly). That’s the best-case scenario, one in which oil-sensitive currencies can gain, but China-sensitive ones will struggle.
The risk is that growth slows more sharply in China, causing capital to take fright. Pity the currencies of nations with big current account deficits then [such as the UK]. There are other dangers lurking too, like the UK referendum, the US presidential election and rising anti-European sentiment into the 2017 elections.