Sterling drops to the prospect of a Brexit without agreement

The pound sterling continued to fall on the foreign exchange markets as the government insists that the UK is ready to leave the EU without agreement.

The pound fell in day-to-day trade in Asia to reach its lowest level in two years at 1.2152 US dollar.

The currency also lost ground against the euro, falling to 1.0912 €.

Under the new Prime Minister Boris Johnson, the government has hardened its position on a Brexit without agreement which, according to him, constitutes "a very real prospect".

The pound, which was trading around 1.50 US dollar against the dollar before the June 2016 European referendum, has fallen 2.4% since Monday, when a spokeswoman for Downing Street said that the UK would not start negotiations with Europe unless the so-called Irish net is scrapped.

She stated that, as the EU had stated that it did not want to renegotiate on this point, "we must badume that there will be no

It follows comments this weekend by Michael Gove, who wrote in the Sunday Times that the government "is currently working on the hypothesis" of a Brexit without agreement,

Johnson appeared to take a slightly softer tone Monday afternoon, when he said he would "hold hands" and "go the extra miles" to conclude a new Brexit deal.

However, it was not enough to prevent overnight slippage in pounds sterling.

Seema Shah, chief global investment strategist at Principal Global Investors, said: "If it seems that this behemoth can not be stopped, we expect the pound sterling to continue to fall."

She said the pound could go down to $ 1.18 against the dollar, but she added, "It is widely believed that Brexit without agreement will be halted."

But Shah warned that if the UK leaves the EU on October 31 without an agreement, the pound could fall to $ 1.18 "pretty quickly".

Laura Lambie, Senior Director of Investments at Investec Wealth & Investment, warned that the pound could still fall if the UK collapses out of the EU without an agreement.

"I think investors see a non-transaction as a risk and not a certainty," she said. "This means that if we leave the EU without an agreement, the pound sterling has yet to fall."