The pound continued to hover around its lowest level against the euro since the financial crisis on Monday, as Brexit uncertainty and economic jitters kept international investors at bay.
Early morning, sterling was trading around €1.089, not far off its lowest level in around eight years, bar a single flash-crash in October. It was at around $1.295 against the dollar.
On a trade-weighted basis the currency suffered its worst performance since October in August. Last month was also its fourth consecutive month of declines against the euro and forecasters are not expecting significant relief in September, as parliament resumes.
“It has become obvious that there are not only big differences in the views on Brexit between the Tories and […] Labour party, but within the Conservative Party as well,” Thu Lan Nguyen, a foreign-exchange strategist at Commerzbank in Frankfurt told Bloomberg.
She said that if the Government is unable to deliver clarity, “that’s likely to increase unease among pound investors”.
Economists at HSBC see the pound falling to parity against the euro in the last three months of this year. Their peers at Morgan Stanley think one pound will be worth just as much as one euro at the start of 2018.
At some airport exchanges, the pound is already fetching significantly less than €1.
