The £ has dropped to its lowest levels against the $ since 1985 as British Prime Minister Theresa May spurs concern the UK is headed for a ‘hard’ Brexit, which would restrict the UK’s access to the single market. The markets are now facing the reality that Brexit is happening, and that there could be a tough road ahead. For the short term however, this sharp decline in sterling is great news for smart investors as now could be the perfect time to make a currency switch.
The £ fell 0.7% to $1.2754 as of 4:50 p.m. in London, and touched $1.2720, the lowest since 1985. It sank 0.8% to 87.97 pence per euro, after dropping to the weakest since February 2013.
Individuals buying sterling at these historically low levels this week can benefit from the £ woes. The £ losses this week buoyed the FTSE 100 Index of stocks, which nearly broke new ground on Tuesday, falling only a point short of its record high of 7,122 set in April 2015. The low sterling is also a safeguard for exporters who will take advantage of these lower exchange rates, helping to cushion the British economy.