Brexit fears and Boris dampen Sterling
Any ecommerce sellers trading overseas will have been keeping an eye on the performance of Sterling in relation to the Euro and the US Dollar. And there is little good news.
This week, Sterling has declined by 2% to its lowest point since March 2009 and the Pound has had its 35th worst day against the USD since 1971.
Jeremy Cook of World First says of the situation: “Despite a positive reaction on Friday night to the announcement of a deal between the EU and UK which Cameron hailed as a victory, sterling has found itself back lower through the Asian session following the news that Boris Johnson will campaign for the UK to leave. His decision has prompted the single largest daily fall in GBPUSD for 12 months.
The pound has now lost over three cents today, tumbling by over 2.3%, as Boris Johnson’s decision to back the Out campaign continues to cause shockwaves through the international currency markets
Do we think that Boris Johnson’s decision to go one way or the other is worth a 2 cent move in GBPUSD? Absolutely not, but traders and investors have been waiting for an opportunity to give sterling a smack and the Mayor of London has handed them a big old bat with which to do it. At the beginning of the year we warned that the campaign into the vote would be pockmarked by some deep falls in sterling. Fundamentals remain strong here in the UK, but politics can always outweigh fundamentals.”