No-deal Brexit risk pushes pound to lowest since 2017

Bloomberg

The pound and gilt yields slid to multi-year lows as UK PM Boris Johnson stepped up preparations for a no-deal Brexit with just about three months left until the nation exits the European Union.
Sterling tumbled the most among the Group-of-10 currencies as various members of Johnson’s top team took a tough stance. UK Chancellor Sajid Javid said he was stepping up Treasury preparations for no-deal and top aide Michael Gove wrote in the Sunday Times that the government was “working on the assumption” the talks with the EU would fail.
Johnson, a former mayor of London, is seen as more likely to try to push through a no-deal Brexit than his predecessor Theresa May and Morgan Stanley sees the pound falling to as low as parity with the dollar if Britain exits the EU without an agreement.
“Sterling should remain under pressure and head towards $1.20 levels over the coming months if early elections materialise and the Conservative party under PM Johnson runs on a ticket of a divisive Brexit stance versus the EU,” said Petr Krpata, a currency strategist at ING Groep NV.
Sterling slid as much as 1.1 percent to $1.2244 in London, the lowest level since March 2017. It weakened 1 percent to 90.80 pence per euro. The yield on UK 10-year government bonds fell as much as six basis points to 0.63 percent, the lowest level since August 2016.
The PM told reporters that a no-deal departure from the EU was “absolutely not” the assumption but said it was still responsible to prepare for that outcome.
Johnson continued to say that the Irish border backstop plan is “dead”.
His comments came after Irish Foreign Minister Simon Coveney reiterated that the Brexit withdrawal agreement, in which the backstop plays a key part, was closed.