Pound hits two-year low against US dollar
The pound fell to its lowest rate against the dollar since March 2017 early on Tuesday after both prime ministerial candidates refused to take a no-deal Brexit off the table at Monday’s Conservative leadership debate.
The pound fell to $1.2396 early on Tuesday, the first instance in which it had fallen below $1.24 in two years.
It did recover ground throughout the day, eventually closing at $1.2409, a decline of 0.9 per cent since Tuesday’s opening.
The pound also fell 0.5 per cent against the Euro, to 90.47 pence.
Johnson and Hunt both made their opposition clear to the Northern Irish backstop during the debate.
Meanwhile, Johnson hinted that he would consider suspending parliament in October if he assumes the premiership according to Sky News' coverage of the debate, removing a further barrier to a no-deal Brexit and igniting further fears which have taken their toll on the pound.
Shadow Chancellor John McDonnell said: “The instability and uncertainty caused by the Conservative party leadership contest has real-world consequences.”
Lombard Odier’s head of global forex strategy, Vasileios Gkionakis, added: “The market is pricing in higher probability of a no-deal Brexit and an increase of economic pressure. You therefore have the perfect storm for sterling”.