The British pound on Tuesday languished near this year’s low on rising worries that Boris Johnson, the front-runner to replace UK Prime Minister Theresa May, could put Britain on a path towards a dreaded no-deal Brexit.

The Australian dollar is also at its lowest levels since the flash crash of early January, hit by growing expectations of another rate cut by the country’s central bank and by the specter of a further slowdown in China – Australia’s largest export market.

The yen and the euro were steadier, with investors holding out for trading clues from policy-setting meetings by the U.S. Federal Reserve and the Bank of Japan as well as a conference organized by the European Central Bank, all scheduled this week.

“While major currencies were little moved now, when you look at market moves over the past week or so, many commodity currencies and emerging market currencies are weak, reflecting broad risk-off sentiment,” said Masashi Hashimoto, senior analyst at MUFG Bank.

The U.S-China trade frictions and rising geopolitical tensions in the Strait of Hormuz after recent attacks on tankers are all undermining risk sentiment, he said.

Worries about Brexit hit the British pound, which tumbled to a 5-1/2-month low of 1.2532 U.S. dollars on Monday and last traded at 1.2539 U.S. dollars.

Sterling also fell to its weakest level since January against the euro, which climbed to 89.50 pence, compared to a two-year low of 84.56 touched just over a month ago.

(REUTERS)