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Abu Dhabi, UAEWednesday 12 December 2018

UK pound plunges most since 2017 giving UAE residents remittance opportunity

Fall in sterling has come amid Brexit chaos

British 10 and five pound banknotes. The pound plunged on Thursday morning. Bloomberg
British 10 and five pound banknotes. The pound plunged on Thursday morning. Bloomberg

The British pound fell the most since 2017 this morning amid political chaos surrounding the Brexit deal, giving UAE residents remittance opportunity.

Prime Minister Theresa May saw the UK's Minister for Exiting the European Union Dominic Raab resign in protest of the draft Brexit deal, while Ester McVey the Work and Pensions Minister and a Junior Northern Ireland minister also resigned on Thursday morning.

Sterling dropped 1.6 per cent, the most since June 2017, to $1.2780. It weakened 1.4 per cent to 88.29 pence per euro.

Naeem Aslam, chief market analyst at ThinkMarkets UK, described sterling as being "on its deathbed today".

He said it "could easily touch the 1.2767 mark very soon. That would be a drop of nearly -3.08 per cent from its previous peak of 1.3170 formed on November 7. The UK’s retail sales number were a complete disaster, the largest decline in seven months. The online goods sold saw a major set back, thanks to the new budget perhaps."

The draft agreement on the UK's withdrawal from the organisation was approved by Mrs May's cabinet on Wednesday.

"The reaction is sterling shows that the chance of no Brexit deal has spiked," Tim Graf, head of macro strategy for EMEA at State Street Global Markets, told Reuters.

"It also introduces thoughts of a leadership challenge (for Theresa May) which seems likely now."

The falling pound offers a window of opportunity for British residents in the UAE to send money home.

One British resident in Abu Dhabi told The National that he "may dip his toe in at $1.27" but expects it to fall further so will probably hang on while the Brexit chaos continues.

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