07 August 2018 ( Lagos): In currency markets, the Pound fell to an 11-month low against the Dollar on Monday on renewed worries that the U.K. will break away from the E.U. with no deal. This came after Trade Minister Liam Fox put the chances of Britain leaving the E.U. without a deal at “60 – 40”. Pessimistic voices out of the U.K. are increasing.
Fox’s comments came after BoE Governor Mark Carney warned that the risk of a no-deal Brexit is “uncomfortably high”. The more we hear the term “no Brexit deal” from U.K. officials, the more selling pressure is expected to be felt by the Sterling. GBPUSD has fallen by more than 10% from its 2-year high recorded on 17 April and this downtrend is likely to resume unless there is a positive surprise breakthrough.
The Turkish Lira also came under renewed selling pressure, tumbling more than 6% on Monday to a hit a new record low of 5.42 against the Dollar as tensions escalated between Washington and Ankara. The central bank’s change of reserve rules to support foreign exchange liquidity seems to have had a limited effect on the currency. The only tool that may provide some relief for the currency for the moment is raising interest rates, but there doesn’t seem to be a willingness to do so.
Source: Hussein Sayed, Chief Market Strategist at FXTM
Reporting for EasyKobo on Tuesday ,07 August 2018 in Lagos, Nigeria