The pound was engulfed in a heavy selloff on Wednesday, skidding to its lowest levels against the dollar and euro in almost a year as markets ramped up bets on Britain leaving the EU without an agreement with Brussels.
London-based traders reported a significant increase in investor hedging against a possible freefall in sterling in the event of a 'no-deal' Brexit, which could damage the economy by raising trade barriers with the UK's biggest export market.
The exodus began after UK trade minister Liam Fox said on Sunday there was up to a 60 percent chance the country could leave the European Union next March without any new trade deals in place. The currency move has snowballed since.
Sterling tumbled against the euro, dollar, yen and Swiss franc.
The slide against the euro, the biggest one-day fall since end-May, left the pound below 90 pence for the first time in nine months.
Sterling slumped 0.6 percent versus the euro to 90.175 pence. The pound fell to as low as $1.2859 against the dollar. The pound has fallen 10.6 percent since mid-April versus the greenback and is down almost 5 percent year-to-date.
Source : Reuters