The pound fell to its lowest level since 2017, as the market again assesses the risk of no-deal Brexit for a transition period after bidders for the post of British Prime Minister increased their demands to revise Brexit conditions. Sterling was at its lowest level in the last two years against the dollar and reached a six-month low against the euro, since the Brexit talks seemed to have become more hostile. Both contenders for leadership, Boris Johnson and Jeremy Hunt, said that the so-called safety plan, aimed at avoiding the hard border in Ireland, which Brussels considers necessary, should be canceled.
After a strong start of the year, the pound is now on its way to become the worst currency in the G10. The new British Prime Minister will be appointed next week. Meanwhile, the Brexit deadline, postponed to October 31, is approaching.
The UK currency fell by 0.7% to 1.2429 dollars by 12:56 London time on Tuesday, having previously reached a minimum of two years at 1.2407. The overall decline this month was already 2.1%. It fell 0.5% to 90.38 pence per euro, its lowest level since January 11. The British currency also fell against the Swiss franc to its lowest level since August 2017.