The 'great British peso' has had a rough week, and it's only Tuesday. Adding to Monday's sharp selloff, sparked by fears that Boris Johnson is planning to take the UK out of the EU without a deal, the pound tumbled to fresh two-year lows on Tuesday, bringing the currency's total drop over the past four trading days to 2.5%, and 4% since the end of June.
The market's anxieties about a no-deal Brexit are probably here to stay (at least until Oct. 31), with neither the EU nor Johnson willing to compromise on the hated "Irish Backstop". Monday was a "huge day" of selling for GBPUSD, according to Robert Turner, a quant trader at RBC in London, per the FT.
Turner said flows out of sterling were the highest since Dec. 11 last year, which coincided with "the height of the concern over an imminent no-deal exit."
If the currency doesn't see a sharp rebound in the near future, it will be on track for its worst run of losses in nearly three years over the past four trading sessions.
Still, some analysts insisted that they don't see a no-deal Brexit as their 'base case', though they believe the weakness in the pound will get worse before it gets better, according to Bloomberg.
Karen Ward, market strategist at JPMorgan Asset Management, added: "Whilst 'no deal' is still not our expected outcome, the newsflow - politically and economically - is likely to get worse before it gets better, so sterling may have further to fall."
Johnson will travel to Wales on Tuesday where he will meet with farmers and try to quiet their fears about a 'no deal' Brexit, which some have warned could lead to civil unrest. Johnson was booed in Scotland on Monday, and will visit Northern Ireland later this week.
Johnson's no-deal planning minister, Michael Gove, will chair on Tuesday the first daily ministerial meeting to perepare for a disorderly Brexit on Oct. 31.