At the open: Sterling sell-off starts again as weak economic data trickles in
After a week-long hiatus, sterling resumed its downwards drift again this morning, tumbling against the dollar and the euro overnight as the post-referendum rally showed signs of faltering.
The pound lost 0.7 per cent against both the major currencies to stand at $1.3187 and €1.1832 as the markets opened in London. That's a fresh 31-year low against the dollar and a new two-and-a-half year low against the euro – right in time for the summer holidays.
The pound has now lost nearly 20 cents against the dollar and 12 against the euro since before the referendum. Even after the dramatic falls on Friday 24 June – the day after the result was announced – five cents has been lost against both currencies.
Overnight, the first post-Brexit business confidence survey from YouGov and the Centre for Economics and Business Research (CEBR) made for grim reading. It showed the number of firms feeling pessimistic about the future had doubled from 25 per cent to 49 per cent.
It came off the back of a difficult day for the markets, which had to digest a "dire" purchasing managers' index (PMI) for the construction industry – PMI slumped to a seven-year low. That news was followed later in the day by Standard Life's announcement that it had suspended trading in its UK real estate fund in response to a spike in withdrawals since the vote.
All of which was weighing on Asian markets overnight and has put a dampener on proceedings in Europe. The FTSE 100 slid 0.5 per cent at the start of the day, dropping to 6,486. In Paris, the French Cac 40 lost 0.9 per cent, as did the Dax in Germany.
With the US back from 4 July shindigs and some big economic data out this morning in the shape of the services PMIs for both the UK and the Eurozone, it could be a bumpy morning on the markets.