Pound slides downwards as trading opens after Johnson's Brexit backing
UK currency falls against dollar, euro and yen because of Boris' popularity
Experts admit chances of EU exit causes uncertainty - as has PM's deal
http://dollars-vedioonline.blogspot.com/2016/02/boris-johnsons-decision-to-back-eu-exit.html
Boris Johnson's decision to defy David Cameron and back a Brexit caused the pound to fall off a cliff this morning.
Britain's currency slid to its lowest level for almost a year after the Mayor of London's decision to side with the Out campaign.
Experts believe that Mr Johnson's decision to back an EU exit yesterday is not only a major blow to David Cameron's campaign - it has also led to uncertainty in the financial markets.
Scramble: The Mayor of London cycles through a crowd of journalists outside his London today as experts say his decision not to join the In campaign is troubling the markets
Traders began selling off the pound when the markets opened this morning and the pound instantly dropped by 1.5 per cent - from $1.44 to the pound on Friday to just $1.419 today.
If maintained, that would mark its biggest one-day fall in 11 months.
Alvin Tan, a strategist with French bank Societe Generale in London said: 'The out camp were struggling to get a figurehead who was popular and Boris has given them that boost,' said Alvin Tan, a strategist with French bank Societe Generale in London.
'I think there is genuine worry that Britain might vote to leave and the uncertainty is going to rise into the referendum.'
Sterling also fell sharply against euro, losing around one per cent to 78.08 pence per euro.
The pound also dipped below 160 yen for the first time in more than two years.
Currency markets were digesting the EU reform package secured by Prime Minister David Cameron ahead of an In/Out referendum on June 23.
Michael Hewson, chief market analyst at CMC Markets UK, said the forthcoming EU referendum was adding to the many concerns 'troubling' investors, which included the impact of an economic slowdown in China.
Karl Goody, from Shaw and Partners in Sydney, told Bloomberg News: 'People are looking at the sell-off this year and saying: enough is enough, there's been enough pain now'.
Chris Weston of City firm IG said: 'BoJo (Boris Johnson) showing his hand does throw a spanner in the works, but the odds of a 'Brexit' are still around 35 per cent'.
Row: Boris Johnson (right) informed David Cameron (left) that he was making the announcement by text just nine minutes before
Mr Johnson announced on Sunday that he would back the Out campaign, stating that the EU was fuelling political disengagement by voters and driving the rise of extremist parties.
He added that if the forthcoming referendum delivered a vote to remain in, Britain faced a further erosion of democracy.
Mr Johnson's support for Brexit was seen as a blow to the Prime Minister.
But Mr Cameron has been boosted by reports that bosses of around half of Britain's 100 biggest companies are preparing to back his campaign to keep the country in the European Union.
The chairmen and chief executives of around 50 FTSE companies are prepared to sign a letter in support of the Prime Minister's renegotiation package, the Financial Times reported.
Supporters are said to include senior figures from Shell, BAE Systems, BT and Rio Tinto.
A draft of the letter, which is due to be published on Tuesday, states: 'Following the Prime Minister's renegotiation, we believe that Britain is better off staying in a reformed EU.'
Posts
No comments:
Post a Comment