Pound plunges after fears of no-deal Brexit raised

Attempt to prevent opposition MPs blocking planned withdrawal from EU rocks markets

epa07798938 (FILE) - British Prime Minister Boris Johnson waves as he enters 10 Downing Street following his appointment by the Queen in London, Britain, 24 July 2019 (re-issued 28 August 2019). According to reports, British government has formally requested the intervention of the Queen in a bid to suspend parliament. A government source said the government's intention is to suspend parliament and hold a Queen's speech 14 October, setting out the future plans of a post-Brexit government. EPA/NEIL HALL

Boris Johnson said MPs would have plenty to time to debate Brexit. EPA

Aug 29, 2019

The pound plummeted below $1.22 and €1.10 on Wednesday after fears of a no-deal Brexit increased when the government said it would end the current session of parliament after September 9.

In a letter to his party colleagues, Prime Minister Boris Johnson said he would suspend parliament until October 14 as his government prepares a new legislative agenda. The announcement makes it harder for opposition parties to table legislation that would prevent the UK falling out of the European Union on October 31 without a divorce agreement.

By Wednesday afternoon the loss had pared to nearer 0.6 per cent - still down some 3.7 per cent over three months.

Critics of a no-deal Brexit, which includes many ‘moderate’ members of Mr Johnson’s ruling Conservative Party, argue that a clean break from Brussels will devastate the UK economy and send it falling into a recession.

Sterling crushed on reports UK govt. will imminently suspend parliament:#GBP -0.85% against other currencies#GBPUSD 1.21707 -0.97%#EURGBP 0.91135 +0.99%#GBPAUD 1.8039 -0.9%#GBPJPY 128.622 -1.04%#GBPCAD 1.6193 -0.79%#GBPCHF 1.19466 -0.95% pic.twitter.com/SfZqlSAyky
— IGSquawk (@IGSquawk) August 28, 2019

“It just underscores the veil of uncertainty the pound is facing, the still non-negligible risk of no-deal Brexit and the vulnerability of the currency to negative headline news,” said Petr Krpata, a strategist at ING Groep NV.

Britain's Prime Minister Boris Johnson waves from the steps outside 10 Downing Street in London. AP Photo

UK government to ask Queen Elizabeth to suspend parliament

Anti-Brexit leaders come together to agree on path to stop no-deal departure

Boris Johnson: UK will ‘easily cope’ with no-deal Brexit

MPs opposed to a no-deal Brexit altogether had finally come together on Tuesday to set out their plans to stop a hard withdrawal from the EU. On Tuesday, the pound had hit a one-month high against the dollar and the euro following the news.

“For the pound to recover the fall this morning, anti-no deal MPs will have to get their acts together in the first weeks of September,” said Jordan Rochester, a strategist at Nomura.

Mr Johnson, an arch Eurosceptic, has said the UK will leave with or without a deal on October 31. His preference is to renegotiate a divorce agreement with Brussels despite the latter’s insistence this is not possible.

The prime minister’s predecessor Theresa May stepped down after seeing her withdrawal agreement rejected three times by parliament.