Pound heads for two-year low as holidays begin

Pound heads for two-year low as holidays begin

  • 9 July 2019
  • comments
Related Topics
  • Brexit
Image copyright Getty Images

The pound is heading for two-year lows against the dollar as markets react to continuing Brexit uncertainty and signs that the UK economy is slowing.

The currency fell sharply after data showed slowing sales at UK retailers and economists forecast a contraction in the economy in the second quarter.

Against the dollar, the pound fell below $1.25 and was close to its lowest level since April 2017.

The pound was also at a six-month low against the euro at just above €1.11.

With the holiday season getting underway, it means travellers from the UK will getting fewer dollars and euros for their pounds.

Sterling has been swayed by uncertainty in the aftermath of the EU referendum, but has been more stable in recent months because of confidence about the UK economy.

However, recent economic surveys have suggested that the economy may now be weakening and Jane Foley, head of foreign exchange strategy at Rabobank, said this was being factored into the market.

"The economic picture is not particularly pretty," she said.

The pound fell 0.5% against the dollar at $1.2455, marking the lowest point for it since April 2017, excluding a brief "flash fall" in January this year.

Back in May, the pound had been trading at around $1.27.

Pound v dollar