Pound weak on post-Brexit fall­out

Pakistan Observer - - ECONOMY WATCH -

TOKYO—The pound was sit­ting at three-decade lows Mon­day morning as cur­rency mar­kets were left reel­ing from Bri­tain’s shock de­ci­sion to leave the Euro­pean Union. Ster­ling col­lapsed to its low­est level since 1985 on Fri­day ahead of of­fi­cial ref­er­en­dum re­sults as early num­bers sug­gested that the vote would sur­prise mar­kets, which had widely ex­pected vot­ers to opt for the sta­tus quo. On Mon­day morning in Tokyo, the pound was at $1.3379, off $1.3670 in New York but still above $1.3229, its low­est point ear­lier Fri­day.

“Peo­ple are find­ing it dif­fi­cult to com­pre­hend what Brexit im­plies for the fu­ture—we don’t know yet what the mag­ni­tude of the shock will be,” Steven Bar­row, head of Group-of-10 strat­egy at Stan­dard Bank Group in Lon­don, told Bloomberg News. The euro bought 82.07 pence against 81.31 pence, while the dol­lar ticked up to 102.34 yen, from 102.21 yen on Fri­day. Ja­pan’s cur­rency surged Fri­day as traders scooped up the safe-haven unit, seen as a safe bet in times of tur­moil.

But the rally in the yen, which had al­ready been on the up­swing be­fore the vote, poses a threat to prof­its at ma­jor Ja­panese ex­porters.—AFP

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