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3/22/2016, 5:57 PM (Source: TeleTrader)
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Pound sinks as attacks in Belgium fuel Brexit arguments

Sterling plummetted on Tuesday against major currencies as traders speculated the two bomb attacks in Brussels will benefit the campaign for the United Kingdom to leave the European Union, as migration is one of the most important issues in the upcoming referendum. Proponents of Brexit oppose the regime of the flow of people within the bloc under the terms accepted by prime minister David Cameron, who leads the stay camp. His government suffered a blow after its prominent member Iain Duncan Smith, secretary of state for work and pensions, quit on March 18, even though he soon denied he resigned because of the referendum.    

Moody's Investors Service added to the bearish sentiment today, as it said in a report that British business and education entities could be downgraded if citizens vote to leave EU. Lower credit ratings may not be the only consequence, as economic growth will probably slow and the negotiations on the status of Britain in relation to European markets could be long and difficult, according to the company. Moody's pointed out that carmakers, manufacturers, retailers and universities are especially vulnerable to a potential change in business conditions.

The pound fell 1.13% versus the dollar at 5:51 p.m. CET, trading at 1.4206, just above the session's minimum. The British currency shed 0.81% against the euro and 1.04% compared to the yen. Versus the Australian dollar, sterling sunk 1.59% to 1.8657, after touching 1.8611, the lowest level since January 2015.  

Baha Breaking News (BBN) / IT