Pound slump deepens as Brexit hits more UK funds

08/07/2016 08:49 AST

The pound dropped back toward the 31-year low reached Wednesday after four more UK property funds halted withdrawals, bringing the total to seven this week.

Sterling slumped the most among developed-market currencies for a third day Thursday with concern escalating about the fallout from the UK vote to leave the European Union as investors rush to dump real-estate holdings. The yen rose for a third day, ahead of a speech by Bank of Japan Governor Haruhiko Kuroda.

“There’s still plenty more downside to come for sterling,” said Ray Attrill, co-head of FX strategy at National Australia Bank Ltd. in Sydney. “We’re targeting $1.20 next year, but the risk is that we get there much sooner than that.”

The pound dropped 0.1 per cent to $1.2913 as of 9:01 a.m. in Tokyo from Wednesday, when it touched $1.2798 for the first time since June 1985. The yen advanced 0.2 percent to 101.14 per dollar, and 0.3 percent to 112.19 per euro. It reached 99.02 per dollar for the first time since November 2013 on June 24, in the immediate aftermath of the Brexit vote.

“The yen is gaining because it is the world’s preeminent safe-haven currency, and dipping below 100 per dollar again is only a matter of time,” said Joseph Capurso, a senior currency strategist in Sydney at Commonwealth Bank of Australia. “Our year-end forecast for the pound of $1.26 looks like it will be met early. At the rate it’s falling, it could be Friday afternoon.”


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