Sterling continues down as traders fear the impact of Brexit without agreement | Business

Sterling has been under new selling pressure, while the United Kingdom has been increasingly concerned about the strength of the British economy and Brexit is hopeless.

The British pound lost more than half a cent to fall to $ 1.245 against the dollar on Tuesday, continuing the plunge in exchange rates since Theresa May sparked the Conservative government's leadership race earlier this month latest.

This was the lowest level in more than two years, with the exception of a brief "flash crash" in the currency markets in January, when a sudden drop in the pound sterling was quickly reversed. The pound also slid 0.4% against the euro on Tuesday to 1.11 euros, while the FTSE 250, considered more focused on the domestic market than the FTSE 100, lost 0.6% , or 114 points, at 19,467.

The pound has now dropped 5%, or seven cents, against the dollar in the past two months, while Boris Johnson, the country's favorite to replace May, said Britain could leave the country. EU without an agreement at the end of October.

The pound fell from a high of 1.333 US dollar in early March, while hopes of reaching an agreement with the EU were at their peak.

The last sale comes at a time when the UK economy is losing momentum, while stocks, before the initial maturity of Brexit, begin to fade. Official figures expected Wednesday could show that the economy has further retreated in May, after being reversed in April.

Economists are increasingly warning that the economy has probably contracted in the three months to June, raising fears of a technical recession – when the economy shrinks for two consecutive quarters – before Brexit. Businesses have stopped ordering so much after rushing to stockpile earlier this year, while the global economy has also weakened in recent months.

Fiona Cincotta, a senior market badyst at financial trading firm City Index, said: "Recession-related concerns, coupled with Brexit fears, are proving too difficult for traders to believe. pound sterling. And who could blame them? Negative news keeps accumulating. "

Rupert Harrison, a portfolio manager of investment firm BlackRock and former senior adviser to George Osborne, said the risk of an "extreme" Brexit outcome has increased and that investors in foreign currency had not yet fully taken into account these risks.

"It's even more uncertain than it ever was in the process," he said.

City badysts warn that a Brexit without a deal would likely plunge the economy into recession and plummet the pound to a level close to parity against the dollar.

Han Tan, a market badyst at the FXTM financial trading firm, said: "Even if a meaningful Brexit risk measure has already been quantified, the pound sterling could still have more downside losses, if a Brexit without a transaction increased significantly over the next few months. "