The exchange rate of the pound has fallen to a record low against the dollar
The exchange rate of the British pound sterling has fallen to its lowest level against the US dollar. This has happened for the first time over 31 years at the trading session on Tuesday. The reason for this is the analysts’ anxiety about upcoming Britain’s difficult negotiations with Brussels regarding the UK withdrawal from the EU.
At the beginning of the day the pound sterling cost $ 1.2781. This has been 0.5 % lower than the level of the previous session closing. During the trading session the rate has fallen to $ 1.2757. This has become the lowest one since 1985. Meanwhile, the stock index of the UK FTSE 100 has risen by more than 1.1% on Tuesday. The value of the index has risen above 7000 points for the first time over the last 16 months.
The newspaper the Financial Times reports that the pound sterling was put under increased pressure after Theresa May, Prime Minister of the United Kingdom, had made a statement at the weekend. She said the United Kingdom was going to refer to Article 50 of the Lisbon Treaty before March next year. It should be noted that the article regulates the right of a country to leave the European Union.
The review of Commerzbank says: “The investors have some special concerns regarding the uncertainty associated with the firm desire of the British Government to insist on limiting the freedom of movement of the citizens of the EU and the UK. At the moment no one sees the possibility of this condition implementation without the need of taking serious restrictions by the UK regarding the country’s access to the unified European market. “
“Thus, there are growing fears that the country will withdraw from the EU under strict conditions. In its turn, this will probably lead to tangible consequences for the economy and affect the attractiveness of investment in the British currency. So, the pound will remain under pressure while an amicable agreement is not reached “, – analysts say.
The exchange rate of the pound has fallen by more than 14% against the dollar since the end of the first third of the 2016 summer, when British citizens voted for the country’s exit from the European Union.