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Pound nears one-year low amid 'no deal' Brexit fears

The pound has continued its downward slide amid fears of a "no deal" Brexit - nearing a one-year low before making a slight recovery.
Sterling slid to $1.2842 in mid-morning trading, its weakest since 24 August 2017 when it hit $1.2770.
Just after midday, it recouped some of the previous day's losses, rising to $1.2888 only to close the day at $1.2879.While most of the blame for the pound's tumble has been put squarely on fears of the UK crashing out of the European Union without a deal, analysts have been keen to point out that August has always been a difficult month for the currency.
Latest thoughts on $GBP after recent weakness. #Brexit no-deal risks for sure one factor but worth also noting seasonality effects (August being a bad month for the pound). Depending on how you spin it, maybe more $GBP pain to come if UK/Brexit political risks pick-up in Sep/Oct pic.twitter.com/7b2QP0fm7G— Viraj Patel (@VPatelFX) August 9, 2018
Viraj Patel, a currency strategist at ING, tweeted: "Brexit no deal risks for sure one factor but worth also noting seasonality effects (August being a bad month for the pound)."In his accompanying note, Mr Patel explained that trading was light and in the last nine years, sterling has fallen more than 0.5% on seven occasions.
Ed Conway, Sky's economics editor, also said the pound's fall was not all down to Brexit: "If anything, it's as much down to interest rate expectations."
A few notes of caution to those getting excited today about the weak pound. First off, this is not ALL down to Brexit and fears of a no deal. If anything it’s as much down to interest rate expectations. The falls really started after the BoE’s Inflation Report last Thurs pic.twitter.com/FZ2T5I0qeY— Ed Conway (@EdConwaySky) August 9, 2018
Last week, the Bank of England (BoE) raised interest rates above their crisis lows for the first time in nearly a decade.However, BoE Governor Mark Carney warned monetary policy changes needs to "walk not run" - suggesting the cost of borrowing will not rise sharply over the next few years.
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But the pound began to move sharply lower after Liam Fox, the international trade secretary and prominent Brexiteer, put the odds of the UK leaving the EU without a deal at "60-40".Dr Fox's comments came after Mr Carney also warned the risk of the UK leaving the EU without a deal was "uncomfortably high".
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