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Brexit worries push pound to four-month low

Brexit worries push pound to four-month low

The pound sterling hovered near its lowest level in four months versus the U.S. dollar and euro amid concerns about Britain's exit from the European Union.

After a month of relative calmness, tensions regarding Brexit came back again to push the pound down for the 12th session in a row.

Investors are convinced that Britain's exit from the European Union will never go through the British Parliament, which raises the chance of a no-deal Brexit.  

The breakdown of talks between Prime Minister Theresa May and the opposition Labour party has triggered strong selling in the pound.

The government was set to resign after the cabinet meeting where May would ask ministers to offer concessions to Labour to settle a Brexit deal, according to The Times newspaper.

Earlier on Tuesday, the pound collapsed to a low of $1.2685, the lowest level since mid-January, while it is currently trading lower at 1.2702.

Against the euro, the pound also plunged to take the EURGBP pair up to 0.8789, the highest level since mid-February.

On the other hand, the US dollar index, which tracks the green currency movements versus a basket of major currencies, rose to new four-week high of 97.96.

The dollar remained backed by the fact that Federal Reserve chairman Jerome Powell indirectly argued against lower interest rates by saying that it was premature to make a judgment on the impact of trade tariff issues on monetary policy.

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