The pound dropped yesterday to its lowest level against the dollar since 1985, excluding a brief “flash crash” in 2016 that may have been caused by technical glitches, as international investors fret over a political showdown over Brexit this week.
The British currency fell as low as $1.1960, down almost a cent on the day before stabilizing around $1.1990. Not counting the brief plunge in the autumn of 2016, in which the currency fell to $1.1789 for about two minutes before recovering, the pound is now at its lowest level in 34 years.
Brexit is facing a crucial few days as lawmakers challenge Prime Minister Boris Johnson’s insistence that the U.K. will leave the European Union on Oct. 31 even without a deal.
“Markets are extremely negative about the consequences of a no-deal scenario,” said Alex Kuptsikevich, analyst at online brokerage FxPro. “The pound will have a hard time if the [lawmakers’] initiatives fail.”
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