LONDON, July 16 — The pound sank to a six-month low against the euro today after a debate between the two candidates vying to be Britain’s next prime minister re-ignited worries about a no-deal Brexit.
Both frontrunner Boris Johnson and his rival Jeremy Hunt said late yesterday that they would not be willing to accept the so-called Northern Irish backstop element of Theresa May’s Brexit deal, which is one of Brussel’s principal demands in Brexit negotiations.
The backstop is an insurance policy designed to prevent the return of a hard border between EU-member Ireland and British province Northern Ireland.
Brexit jitters, coupled with recent poor British economic data, have been keeping sterling subdued and near its lowest levels in years.
The British currency weakened 0.4 per cent on Tuesday to US$1.2463 (RM5.12), a six-day low. If it drops below US$1.2439 it would sink to its lowest in more than two years, excluding the “flash crash” on January 3 when it dropped to US$1.2409.
Against the euro it fell 0.3 per cent to a low of 90.225 pence, the lowest since January 11.
Traders are awaiting UK employment data at 0830 GMT, which will be watched closely for signs of further economic deterioration. A Reuters poll of economists expect average weekly earnings to rise 3.1 per cent year-on-year in the three months to May, showing same growth as in the comparable period. — Reuters
