Sterling slumps 1.5pc vs dollar on safe-haven demand

Author: Monitoring Desk

After its biggest six-month decline since 2008 against the US dollar, risk-sensitive sterling briefly dipped below $1.20 against a strengthening US dollar and was last 1.5pc lower at $1.2000, Against another safe-haven, the Swiss franc, sterling plunged to its lowest level since March 2020, down 0.8pc to 1.1530. The central bank began raising borrowing costs in December last year, increasing Bank Rate to 1.25pc from a record low of 0.1pc in an attempt to tackle inflation, which rose to a 40-year high of 9.1pc in May. Potential trade clashes with the European Union were also been closely watched amid fears it could harm sterling, analysts said. Legislation, which would unilaterally allow Britain to scrap some of the rules on post-Brexit trade with Northern Ireland is due to be debated in the British parliament on July 13.

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