Pounds falls further, amid no-deal concerns

Yesterday the pound experienced another day of passion. The British currency has fallen to 1.2121 against the dollar and up to 1.0812 against the euro, suggesting that it could fall below the 1.08 threshold soon.

The pound sell-off is therefore continued, with traders beginning to discount the advent of a  no-deal Brexit on October 31st.

The Boris Johnson Government hopes the EU could “change its attitude” with respect to the refusal to renegotiate the divorce agreement sealed in November with Theresa May, rejected three times by the Parliament, and claimed that only a new agreement, purified by the backstop guarantee clause on the Irish border, can avoid a no deal Brexit.

Traders, however, bet on a clear refusal by the Commission to this option and, therefore,  discount an increase of probability of an exit without agreement, which could bring the pound down to the parity with the euro and the dollar.