Dollar Steady, Yen Soars on Refreshed Brexit Concerns

The dollar held steady on Wednesday, hovering near a one-week high against a basket of major currencies. The yen soared as investors flock to safe havens and Brexit concerns continue to mount.

Brexit Blue European Union Eu Flag On Broken Wall And Half Great

Sterling was under increased pressure after the Bank of England warned of the challenges to reach financial stability after the Brexit vote. The central bank also took steps to ease banking sector regulatory requirements.

Mark Carney, Bank of England Governor, said easing regulatory requirements would help the British economy deal with the consequences of exiting the EU.

In its most recent financial stability report, the central bank said its concerns ahead of the Brexit vote were already materializing. The pound has plummeted to a three-decade low and financial stocks plunged 20%.

Last week, Carney hinted that more stimulus may be needed in the coming months to stoke the economy, raising expectations of a rate cut in August.

The pound was lower against the dollar, falling 0.60% to 1.2941 after reaching a new low overnight.

The euro was lower against the dollar but higher against the pound, at 1.1053 and 0.8540 respectively.

Meanwhile, the Japanese yen soared to a three-year high against the pound as investors flock to safe havens amidst mounting concerns of the Brexit fallout.

Sterling slipped 1.8% against the yen, falling to its lowest level since 2012. The dollar fell 1.19% to 100.53 against the yen.

Speculation that the Federal Reserve will hold rates at its next policy meeting was also weighing on the dollar. William Dudley, Fed policymaker, hinted on Tuesday that the effects of the Brexit vote was a risk, especially if the vote led to instability in the EU (European Union).

The effects of the referendum vote are already setting in. Three U.K. property funds were forced to halt redemptions, which sent investors to bonds. The 10-year Treasury yield then sank to a low of 1.3210% on Wednesday. The German Bund 10-year yield fell even deeper into negative territory.

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Daniel Simmons