Rocky start for new PM as Pound his two-year low vs Dollar
Liam Sheasby, News Editor
29 Jul 2019, 12:17 p.m.
He might finally be Prime Minister, but Boris Johnson won’t be happy with this morning’s news that the Pound is steadily falling against the US Dollar. Early trading saw the value of Sterling fall to a two-year low of $1.2358, and the Pound has continued to slide – now at $1.2337.
A weekend of no-deal Brexit talk has unsettled investors, with Michael Gove revealing that Johnson’s new government were “operating on the assumption” of a no-deal Brexit on October 31, and that it was a “very real prospect”.
Many investors are apprehensive of leaving the EU without trade guarantees; a degree of fear reflected in Vauxhall’s warning today that they may close the Ellesmere Port factory if Brexit disrupts the supply chain. Ford have already announced plans to close their Bridgend plant due to the expected disruption from the UK leaving the EU, while car sales and revenue have both been hit at Jaguar Land Rover in the West Midlands.
Gold today hit £1,150.27 per ounce as the weak Pound boosts domestic gold prices, and gold demand in general continues to grow in the face of a combination of geopolitical tension, conflict, and protectionist trade policies.
It was only last Thursday that the Pound hit a one-month high of 1.2419€, with weak Eurozone manufacturing figures undermining the Euro. Since then Sterling has fallen back to 1.1078€; a 10.8% devaluation that risks parity between the two currencies.