Dollar Rises vs Pound, Euro as Hard Brexit Approaches

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The dollar was close to its highest level in nearly three weeks in early trading in Europe Tuesday, as the rising likelihood of a disruptive and disorderly Brexit hit confidence in both the euro and sterling.

At 03:00 AM ET (0700 GMT), the dollar index, which measures the greenback against a basket of six major currencies, was at 96.920, up some 0.2% from its closing levels on Monday.

The pound had fallen nearly a cent late Monday after lawmakers yet again voted down all proposed alternatives to the government’s negotiated Withdrawal Agreement. By 03:00 AM ET, it had recovered a fraction to $1.3044.

The euro likewise fell under $1.12 for the first time in over three weeks after the round of voting, on fears that a hard Brexit could also badly hit the Eurozone economy. Clemens Fuest, President of the Ifo research institute in Munich and a member of the German government’s council of economic advisers, told the radio station Deutschlandfund on Monday that a hard Brexit “could be the straw that breaks the camel’s back” and tips the German economy into recession. By 03:00 AM ET, it was at $1.1197.

Guy Verhofstadt, the EU parliament’s Brexit coordinator, tweeted after the votes that a hard Brexit is now “nearly inevitable”.

Source: Investing.com

Daniel PerkinsComment