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| Britain |
| Pound Whipsawed by Virus Concerns, Relief on Brexit-Talks Offer |
| 2020-12-22 |
| [Bloomberg] The British pound slumped the most since March on concerns about a new strain of coronavirus in the U.K., then pared much of the decline as Prime Minister Boris Johnson made another offer to salvage Brexit talks. Sterling tumbled as much as 2.5% to $1.3188 before recovering most of that in New York afternoon, down only 0.4% to $1.3475 as of 3:25 p.m. Investors were spooked earlier as another Brexit deadline went past without results and Britain’s biggest port in Dover stopped all traffic heading to the continent, threatening the U.K.’s supply chains with Europe. The currency’s one-week implied volatility was the highest for a Christmas period in more than a decade. Expectations of monetary easing by the Bank of England mounted, with money markets bringing forward bets for a 10-basis-point interest-rate cut to September, compared with March 2022 on Friday. Ten-year bonds rallied, with yields slipping as much as nine basis points, and the FTSE 100 share index fell as much as 3.3%. While the slump also reflected the dollar’s strength, the U.K. currency also fell against the euro, with the shared currency rising as much as 1.7% to 92.17 pence. |
| Posted by:Besoeker |