FX round-up: Sterling dives on renewed Brexit jitters

Sterling suffered a torrid time on most major crosses this afternoon as renewed Brexit jitters returned to the market and investors moved quickly to ditch the once-proud British currency.

At about 17:14 BST, sterling was down 0.85% to $1.3056, and was down 0.59% to €1.1529. The dollar-spot index was up 0.43% to $94.566, while gold shed 0.71% to $1347.6 an ounce.

The so-called Article 50 spectre relating to Brexit rose again, after media chat claimed UK Prime Minister Theresa May was sympathetic to starting Britain's divorce from the EU by next April at the latest.

"The pound renewed its plunge into the red this Friday," said Spreadex financial analyst Connor Campbell in a note, referring to the Bloomberg report.

Sterling has been largely on the back foot since UK's non-binding 23 June referendum, when Britain narrowly voted to quit the EU and plunged the pound into uncertainty.

This afternoon, sterling was also down against commodity units the loonie, aussie and kiwi, and fell against the yen's safe-haven appeal.

At 17:14 BST it was down 0.14% to CA$1.6807, down 0.02% to AU$1.7129, and down 0.58% to NZ$1.7964. Against the Japanese issue, the British unit fell 0.52% to 130.850 yen.

There were few macro catalysts in the offing to favour sterling.

UK's public-sector net borrowing hit a £1bn surplus in July, from the £1.2bn surplus seen a year ago, Office for National Statistics said. A surplus of £1.6bn had been anticipated.

German producer prices rose 0.2% in July, from a 0.4% gain in June, Destatis said. A firming of 0.1% was expected.

Meantime, the greenback enjoyed gains against a raft of major currencies ahead of next week's Jackson Hole speech by US Federal Reserve chair Janet Yellen. Pundits are already expecting some modicum of jaw-boning from Yellen.

"There is little space for manoeuvre, with any hawkish comment from Yellen likely to be seen through cynical eyes given the perception of can-kicking in 2016," said IG's Josh Mahony.

SwissQuote took a similar stance: "The Fed's communication strategy is suffering from a lack of credibility. ... The rates markets estimate a low probability for a September hike at 20% and 45% for the December Federal Open Market Committee meeting. Clearly the markets don’t trust the Fed’s language."

At about 17:14 BST, the dollar was up 0.28% to €0.8833 and up 0.76% at CA$1.2879. It rose 0.37% to 100.26 yen, and advanced on the aussie, kiwi and rand, too.