Pound tumble resumes, dragged down by Brexit impasse

LONDON: The dollar was down on Friday morning in Asia, ending the week by giving up earlier gains. Investors had turned to the safe-haven asset after U.S. markets saw yet another stocks selloff overnight.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged down 0.10% to 93.295 by 9:40 PM ET (2:40 AM GMT). The euro also seesawed, initially rising over comments made by European Central Bank (ECB) President Christine Lagarde emphasized that the bank does not target exchange rates. But Lagarde’s comments contradicting her earlier statement as well as the exchange rate’s impact on inflation, saw a subsequent retreat to dollars and slump in the single currency.
The USD/JPY pair inched up 0.02% to 106.16.
The AUD/USD pair edged up 0.19% to 0.7269 and the NZD/USD pair edged up 0.12% to 0.6657. However, both risk currencies could fall a little further during the day amid the fragile investor sentiment, Westpac analysts said in a note.
The USD/CNY pair inched up 0.05% to 6.8371.
The GBP/USD pair inched up 0.03% to 1.2807. The pound faces further volatility, potentially its worst week since March, over the prospect of a no-deal Brexit.
The European Union threatened legal action against the U.K., encouraging the latter to abandon plans announced earlier in the week to break the Brexit divorce treaty. But with the U.K.’s insistence on moving forward with draft legislation potentially breaking international law “in a limited way”, threatens to undo four years of negotiations between the two parties.
The pound, which has already grabbed headlines throughout the week, looks set to remain in the spotlight for a bit longer as the end-of-year Brexit deadline approaches.

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