The pound dropped against all its major peers, breaching an option barrier, on growing fears that U.K. Prime Minister Boris Johnson will opt for a no-deal Brexit.
GBP/USD fell as much as 0.5%, slipping below 1.22 for the first time since March 2017. Johnson warned he won’t start Brexit talks unless the European Union agrees to his demand to reopen the deal they struck with his predecessor
“Boris Johnson putting together a brigade of Brexiteers to take a hard line with the Europeans is seeing markets reacting negatively,” said Kyle Rodda, an analyst at IG Markets Ltd. in Melbourne. “The rates futures curves in the U.K. show an increased chance the Bank of England will cut rates next year as markets price a hard Brexit shock to the economy, and that’s also weighing on the currency”.
Source : Bloomberg