Sterling falls two consecutive days as Brexit fears mount

Brexit continues to dominate the market’s attention and impact sterling. Meanwhile, the Brussels terrorist attacks on Tuesday are seen to likely to boost the “Leave” campaign as the key points are immigration and border controls at the centre of the referendum debate

Negative sentiment towards the UK was also brought about by a combination of internal government problems and a troubling rating agency report on last week’s Budget.

After two days of sharp falls, the pound lost 2.5 per cent lower against the dollar, to trade at $1.4080.

Markets are showing greater concern over the outlook for the British pound in a sign of increasing nervousness about the outcome of June’s referendum on Britain’s membership of the EU.

Recent polls show that the Leave camp is gaining ground over the Remain camp.

Developments this week have put British prime minister David Cameron’s campaign to keep Britain in the EU on the defensive. His government has been knocked by adverse reaction to chancellor George Osborne’s Budget, which has forced a retreat on proposed disability cuts and prompted the resignation of prominent Eurosceptic minister Iain Duncan Smith.

Rating agency Moody’s added to the government’s woes by labelling the chancellor’s fall in gross domestic product expectations and rise in debt forecasts as “credit negative”.

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