Currencies: British pound collapse continues as sterling reaches new two-year low

The British pound on Tuesday came under continued assault, sliding as traders price in an increased possibility of a so-called hard Brexit. Read More...

It was less than a week ago that new British Prime Minister Boris Johnson declared that no one wins betting against the U.K.

Those who ignored his advice have profited handsomely.

The British pound on Tuesday came under continued assault, sliding as traders price in an increased possibility of a so-called hard Brexit. News that Johnson won’t meet European Union leaders unless they are willing to abandon the Irish “backstop” agreed with former Prime Minister Theresa May sent traders fleeing from the U.K. currency on Monday.

The pound GBPUSD, -0.4420% fell as low as $1.2124 on Tuesday, recently trading at $1.2170 vs. $1.2217 on Monday.

The pound was at $1.50 on the day of the non-binding referendum to exit the European Union in 2016.

Against the shared currency, the pound GBPEUR, -0.4560% fell to €1.0924 from €1.0924 on Monday, not far from the all-time low of €1.0757.

Kit Juckes, global head of currency strategy at Societe Generale, said Johnson’s hard-line moves may prove fruitful in winning back those who have deserted the Conservative Party for the Brexit Party but will hurt the pound.

“He is committed to a hard-line stance towards the EU that will of course, be rebuffed aggressively. In the process, sterling moves to the bottom of its post-referendum ranges and re-tests historical trade-weighted lows,” Juckes said.