Pound Under Pressure Amid Brexit Uncertainty As Dollar, Yen Stays Firm

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Azeez Mustapha

Updated: 13 October 2022

The Sterling remains under pressure today due to Brexit uncertainty. But the Swiss franc appears to be in the worst position at the moment, breaking the nearest support level against the US dollar. On the other hand, the yen and dollar remain strong in mixed Asian markets.

The growing risk of no-deal Brexit continued to weigh heavily on the British pound. This, coupled with strong growth in demand for the US dollar, further contributed to the sharp decline in the pair on Tuesday, marking the fifth consecutive day of negative movement.

The yen is not too worried about the data, which showed a deeper-than-expected contraction of the economy in the second quarter.

Instead, everyone is looking at who Japan’s next prime minister will be. The Australian dollar is also trying to rebound, but its upside potential is limited by data on the business environment.

The Yen is one of the most profitable in the market thanks to its risk aversion as well as the fall in the USD/JPY rate. On Wall Street, the Dow Jones fell 1.60%, or 455 points, from a low, while the Nasdaq lost 2.60%. The negative tone of the past week continues.
No-Deal Brexit Preparations
Sterling selloffs are accelerating today as concerns about a no-deal Brexit heighten and talks between the UK and the EU enter Round 8. Before that, Britain’s chief negotiator David Frost called on the EU “for greater realism.”

He said in a statement, “we have now been talking for six months and can no longer afford to go over well-trodden ground. We need to see more realism from the EU about our status as an independent country.”

“If they can’t do that in the very limited time we have left then we will be trading on terms like those the EU has with Australia, and we are ramping up our preparations for the end of the year,” Frost added.