British pound sterling weakens against US dollar

July 6, 2016 6:17 am

A money changer counts British pounds at a booth in Singapore. (AFP photo)

The British pound hit fresh
lows against the dollar and the euro on Wednesday as financial turmoil
intensifies in the wake of ’s decision to leave the European Union.

The
pound, also known as sterling, sank over two and a half cents, or 1.4
percent, to $1.3, the weakest level in 31 years against the currency.
’s vote to exit the EU, known as Brexit, has plunged global markets into turmoil.
The British currency also fell to its lowest since 2013 against the euro. The pound is currently trading at 1.8 euros.
It
has lost more than 14 percent of its value since UK’s referendum last
month to exit the EU, as investors worry about the impact on the British
and continuing uncertainty about the country’s political
direction.
This comes as the Bank of England highlighted a number of risks emanating from the Brexit vote.
The
risks include a hit to the commercial real estate market from the
possible relocation of banking jobs to other European cities.
Last
week, the American financial services company, Standard and Poor’s,
downgraded Britain’s credit rating by two notches, from AAA to AA, a
humiliating blow for the country and one that could cost its economy.
S&P
was the last of the big three ratings agencies to have a blue-chip
rating on the UK’s credit-worthiness. Moody’s, which stripped the UK of
its top-notch rating following the austerity cuts of 2013, said last
week it might further downgrade its credit rating.
The British
departure has triggered concerns that other EU nations may follow,
challenging the political fabric of an alliance that has been
constructed among nearly thirty very different countries.
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