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Abu Dhabi, UAEThursday 13 December 2018

Euro falls to lowest in more than a year as Sterling also drops

Single-bloc currency below $1.13 on Monday and UK pound slides as Italian fight with EC and Brexit fears weigh on both

A shopper hands over two €10 notes in Vienna, Austria. The euro-area currency and the UK pound both tumbled. Bloomberg
A shopper hands over two €10 notes in Vienna, Austria. The euro-area currency and the UK pound both tumbled. Bloomberg

The euro tumbled below $1.13 for the first time in more than a year on Monday as concern over worsening Brexit turmoil and a dispute with the European Commission over Italy’s budget weigh on the shared currency.

The euro fell as much as 0.6 per cent to 1.1269 to the dollar, lowest since June 2017, according to Bloomberg.

The Italian Deputy Premier Matteo Salvini said Sunday his government could halt European Union budget decisions and other policies if the bloc’s partners continue to show disrespect to

his countrymen.

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A 14th century lesson may be coming for Italy

London loses €210 billion a day finance market as Brexit looms

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Sterling also fell on Monday, helping to boost the dollar to a 16-month high, amid mounting doubts over whether UK Prime Minister Theresa May can come up with a Brexit deal that would win the backing of the European Union and her own party.

The pound dropped 0.75 per cent to $1.2877 on growing investor worries over whether an orderly deal to leave the EU would be achieved, Reuters said.

With opposition to Mrs May’s Brexit plan mounting, UK equity traders are paying up for protection. A gauge tracking volatility expectations for the FTSE 100 Index has jumped to its highest level since July relative to the VStoxx Index of euro-zone swings. The prime minister’s main fight now is about whether her guarantees to avoid checks at the Irish border after the divorce will bind Britain to EU rules indefinitely.