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Sterling sinks to near three-year lows below $1.20 as political uncertainty spikes

Sterling sinks to near three-year lows below $1.20 as political uncertainty spikes
FILE PHOTO: UK pound coins plunge into water in this illustration picture, October 26, 2017. Picture taken October 26, 2017. REUTERS/Dado Ruvic/Illustration -
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DADO RUVIC(Reuters)
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LONDON (Reuters) – Sterling plunged below $1.20 (0.9774 pounds) to a near three-year low on Tuesday as political uncertainty jumped after Prime Minister Boris Johnson looked set for a showdown with Parliament over Britain’s departure from the European Union.

British lawmakers will vote Tuesday on the first stage of their plan to block Johnson from pursuing a no-deal Brexit ahead of the Oct. 31 deadline.

Against the dollar, the British currency <GBP=D3> fell 0.7% to a low of $1.1971, the lowest since 1985, barring a flash crash low of $1.1491 hit in October 2016.

Against the euro, however, the pound’s decline was much more limited, falling 0.2% to a two-week low of 91.33 pence.

Johnson implicitly warned lawmakers on Monday that he would seek an election if they tied his hands on Brexit, ruling out ever countenancing a further delay to Britain’s departure from the European Union.

(Reporting by Olga Cotaga; Editing by Saikat Chatterjee)

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