Pound wobbles as Brexit speculation tests investors' nerves
Uncertainty sees currency fluctuate as IMF warns a no-deal Brexit would send the British economy into severe shock
London —The British pound gyrated on Tuesday as rumours and uncertainty about the Brexit endgame played havoc with investors’ nerves. Prime Minister Theresa May launched a new diplomatic push to avert a no-deal Brexit and secure a new delay to the date for leaving the bloc. Sterling bobbed briefly above 1.31/$ in late-morning foreign exchange deals, but then fell back against the dollar. “In a clear example of how headline driven the pound is at present, there’s been a swift move higher and just as quick a drop back lower as the latest round of Brexit rumour and counter-rumour hit the news wires,” said David Cheetham, an analyst with XTB.
He cited reports, later denied, that German Chancellor Angela Merkel was willing to grant a five-year time limit on the backstop, which saw traders rush to buy the pound in anticipation of a breakthrough. “However, the gains were fleeting and they were promptly handed back when it was confirmed the reports were untrue and we can expect more o...