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Markets

Sterling slides to 31-year low on 'hard' Brexit fears

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Opening sequence

Markets

Sterling slides to 31-year low on 'hard' Brexit fears

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COMING UP:Sterling slides to 31-year low on 'hard' Brexit fears

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Transcript

00:00:01
>> Sterling sliding to its lowest level in more than three decades. Dropping against the US dollar Tuesday, on growing worries about Britain's looming exit from the EU. Reuters' Mike Dolan says investors were spooked by comments by UK Prime Minister Theresa May.>> The signals at least from the UK government is that what's called hard Brexit is likely to be the outcome from these negotiations.
00:00:24
And by hard Brexit people mean that they will prioritize a limitation on migration over access to the single market. And this is worrying for the pound because the UK has one of the biggest current account deficits in the OECD. In the absence of, inward investment, the books don't balance and I think this is where the pound takes the heat.
00:00:46
>> But it's a tale of two economies. British stock market soaring on Tuesday, the FTSE 100 smashing 7000 for the first time since May last year.>> The FTSE 100 companies who have lots of overseas earnings will automatically get an accounting fill up from the weekly pound. Because overseas earnings, overseas currencies will be higher on their earnings.
00:01:06
The other aspect is, of course, that they're more competitive at their exporters to the rest of Europe, for example, or into the United States.>> Also helping the European market, a bounce for Germany's biggest bank, Deutsche, as fears ease over its collapse. But with plenty of uncertainty still over how Brexit will unfold, markets could be set for a bumpy ride.
00:01:26
The UK's chancellor warning Monday of a rollercoaster to come.