British Pound further slips to $1.34

British pound fell two per cent to $1.34, still some distance from the
31-year low of $1.3228 touched during Friday’s wild trade. - Sakshi Post

Tokyo:
Brexit jitters are still taking a toll on the foreign exchange (forex) and
financial markets globally. The British pound on Monday tumbled more than two
per cent as markets struggled to shake off deep uncertainty sparked by
Britain’s decision to leave the European Union (EU). The British pound fell two
per cent to $1.34, still some distance from the 31-year low of $1.3228 touched
during Friday’s wild trade.

Sentiment
remained weak even though the worst of the turmoil seen on Friday, when global
stock markets suffered their biggest decline in nearly five years, had eased.

Still, the
US dollar fell 0.6 percent against the safe-haven Japanese Yen to 101.58 yen.
The dollar index .DXY, which tracks the greenback against six major peers,
advanced 0.8 percent to 96.147, remaining near its three-month high of 96.703
touched on Friday.

The
strengthening of US dollar will post some problems for developing economies.
The main risk is that the US dollar strengthens from here and remains strong,
which would sap emerging markets of liquidity via the trade and capital
accounts. And this will hurt the pricing environment in the financial and forex
markets. A stronger US dollar would also bring back fears of potential emerging
market currency devaluations, which would not help the asset class.

Oil prices
in the global markets also eased owing to risk aversion. Although losses
narrowed from earlier in the day. International benchmark Brent futures slipped
0.2 percent to $48.33 per barrel, while US crude slid 0.5 percent to $47.41.

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