Pound suffers further post-Brexit losses

As George Osborne attempts to restore confidence...

Pound suffers further post-Brexit losses

David Cheskin / PA

Sterling has continued to drop against the US dollar, after Friday's shock Brexit result sparked a record crash for the UK's currency.

The pound fell to $1.34 as markets resumed trading in Asia on Monday, a fall of more than 2% on top of the 10% plunge that brought it to a 31-year low on Friday.

Against the euro, the pound was down 1.4% at €1.21.

The British Chancellor of the Exchequer, George Osborne, moved to calm Brexit fears on Monday morning, saying he would do everything he could to make it work for Britain.

He admitted that while it would not be plain sailing in the days ahead, Britain's financial system would help to prevent further shocks and there would be no rush for the EU exit without a clear plan. 

Mr Osborne added there would be no Brexit Budget in the short term.

Global stock markets lost about $2tn in value on Friday.

The FTSE 100 fared better than most – closing 3.2% down on Friday. It was forecast to open a further 2% lower on Monday on the back of fresh falls in Asia and Mr Osborne's statement.

Hong Kong stocks lost ground in the first few minutes. The Hang Seng Index fell 1.36%, or 276 points but Tokyo's Nikkei 225 index was up 2.34% – having dived nearly 8% on Friday in its biggest one-day plunge since Japan's 2011 earthquake-tsunami disaster.

Japanese Prime Minister Shinzo Abe held an emergency meeting with top officials this morning to discuss Brexit and how to deal with the market fallout amid a fresh rush for the safe haven yen.

Japan could intervene in a bid to bring down the value of its currency if it is seen as too much of a threat to its export-led economy.

Ahead of the meeting, Mr Abe said:

"We will make thorough efforts so that [Brexit] will not negatively affect Japan's economy and the business of small to medium-sized firms."

Christine Lagarde, managing director of the International Monetary Fund, said that what happens next depends on how policymakers handle the fallout in the coming days.

Economic risks, she said, depend on the level of uncertainty.

"How they come out in the next few days is going to really drive the direction in which risk will go," Ms Lagarde said last night at the Aspen Ideas Festival in Colorado.

 

Additional reporting by IRN