LONDON (Reuters) - The British pound could rapidly slide to $1.10 if the United Kingdom crashes out of the European Union without a Brexit withdrawal arrangement, BNY Mellon’s chief currencies strategist said on Tuesday.
Simon Derrick said sterling would suffer heavily if the likelihood of a no-deal was confirmed in December or January should Prime Minister Theresa May lose expected parliamentary approval for her Brexit proposals, particularly at a time when market liquidity is thin.
“The point about sterling is when it moves, it moves,” Derrick told journalists, adding that the move could happen “quickly” and also see sterling tumble to around 96-97 pence against the euro.
Sterling was trading at $1.2834 on Tuesday and around 88.82 pence versus the euro.
With less than five months to go until Britain officially leaves the EU, the two sides have yet to finalise a divorce settlement and if none is reached by the end of March, sterling will fall to $1.20, a Reuters poll found earlier this month.
Reporting by Tommy Wilkes; editing by Sujata Rao