Sterling at one-week lows on Brexit concerns, BoE nerves

Tuesday,   28-Jan-2020   03:25 PM (IST)

Britain’s pound slipped to a one-week low against the dollar and weakened against the euro on Tuesday, as concern about Britain’s future relationship with the European Union creeps back onto the radar of currency markets. Ahead of a knife-edge Bank of England interest rate decision on Thursday, sterling has been pushed and pulled this month by speculation over whether an imminent rate cut is likely. But with Britain formally set to leave the European Union on Friday, concerns about future ties were also coming back into focus, analysts said. The European Union will “never, never, never” compromise on the integrity of its single market, its chief Brexit negotiator warned Britain on Monday, saying London must now face reality after underestimating the costs of leaving. Sterling was last down 0.35% at $1.3007, a one-week low. The British currency was a third of a percent weaker against the euro at 84.66 pence, its lowest level in almost a week. Market positioning data released on Friday by the U.S. Commodity Futures Trading Commission suggests that, though speculators have slightly reduced net longs in sterling, they hold a substantially large long position. Those long positions are likely to remain under pressure this week before the central bank decision in a broader market that is wary of adding to risky positions. Other major currencies were broadly stable with the dollar hovering at an eight-week high as investors focused on the economic fallout from the new coronavirus that has killed 106 people in China.