The pound’s dramatic slip to a 31-year low against the US dollar is “not unwelcome”, according to Britain’s new under secretary for international trade. The pound sterling plunged as much as 6 per cent in early Asian morning trading on Friday against the greenback after the French president pushed for a hard exit for Britain from the European Union. The pound had “probably been too high anyway” against the euro and the dollar, and its drop was “clearly to do with the [Brexit] vote, but it’s not an unwelcome reaction,” said Mark Garnier, Britain’s parliamentary under secretary of state at the new Department for International Trade, during a press conference in Hong Kong. The pound weakened to 1.1841 per dollar after president Hollande’s comments. It was trading recently at 1.2364 per dollar, and 1.1099 against the euro. The plunge in the currency may have been exacerbated by algorithmic trading programmes, driving the currency lower by as much as 6.1 per cent over a two-minute period during Asian trading, according to a Bloomberg report, citing traders. Currency volatility was “a bad thing” and would be a factor in investors’ confidence in Britain, Garnier said. Part of the problem was that the British parliament wasn’t sitting at the moment which meant there was a deficit of news, he said. “The sterling is probably about where it should be. We’ve probably found stability at this level,” Garnier said. “What we don’t want is to see it jumping around five per cent on a weekly basis – nobody wants their currency to be volatile.” Clearly it’s to do with the [Brexit] vote, but actually it’s not an unwelcome reaction. Sterling is probably about where it should be Mark Garnier, parliamentary under secretary of state at Britain’s Department for International Trade On Thursday, the currency hovered around $1.2720 after hitting a low of $1.2686 on Wednesday. The sharp fall on Friday takes its losses to 3.6 per cent since Monday, according to Reuters data. Speaking in Paris at a dinner attended by EU officials, Hollande was quoted by the Financial Times as saying “we must go all the way through with the UK’s willingness to leave the EU. We have to have this firmness.” “If not, we would jeopardise the fundamental principles of the EU,” Hollande warned, suggesting the EU needs to make an example of Britain so that other nations considering leaving will know they can’t do it without a cost. Hollande’s comments follow similar remarks by German Chancellor Angela Merkel, who said on Thursday that Britain would not receive any special treatment once it left the economic bloc. The hefty pound selling began to accelerate following British Prime Minister Theresa May’s announcement on Sunday that Article 50, a piece of legislation that launches the exit process, could start by the first quarter of 2017. It might not be the end of the slips, with London Business School professor of economics Richard Portes saying he expected to see further exchange rate depreciation once article 50 was triggered. Garnier was in Hong Kong for a day as part of a brief regional tour taking in Thailand and Japan, where he is working to reassure investors that Britain is worth investing in. He’s the fifth senior British official to come to Hong Kong since the Brexit vote in June, after earlier visits Cha ncellor of the Exchequer Philip Hammond , and Lord Mayor of the City of London , Jeffrey Mountevans. “It would be very easy to turn around and say: ‘this is the end of the world’. Actually it’s not, it’s the opposite, it’s a great opportunity for us to do more trade,” he added. “It’s about going out and selling Britain, about making sure people understand what’s going on and understand that we are very much interested in doing business with everybody.” When asked whether the strong push to sell Britain indicated the government was concerned, Garnier said: “You can interpret it whatever way you like. This isn’t being idealistically optimistic in order to pretend it’s not disastrous. Genuinely speaking when you have disruptive events, it provides great opportunities.” The sense we get is that there is a great demand for the British brand. The demand in China is as yet an unmet demand Mark Garnier, parliamentary under secretary of state at Britain’s new Department for International Trade Around 11 per cent of British businesses that could be doing business overseas are doing business overseas, Garnier said, adding he sees China as a huge opportunity. “The sense we get is that there is a great demand for the British brand. The demand in China is as yet an unmet demand.” Garnier said the UK needed to do more work at home to persuade its local businesses that selling to China was “as easy as selling to the town next door”. Until Britain begins the formal Brexit procedure by triggering article 50 in March, it can’t start hard negotiations, he said, but he’s hoping to negotiate a low-tarriff trade deal with China. August trade data released on Friday showed UK’s imports rose while its exports fell on the month before. Exports to China fell from £1.14 billion in July to £838 million in August, the lowest level since September last year, while imports from China increased from £3.21 billion to £3.60 billion. Exports to China were down 31.8 per cent for the June to August period on the previous three months. “For companies that are already in the UK, the income from their investments will fall when translated back into yuan or Hong Kong dollars. This would be particularly of significance for investment in long term infrastructure projects, which pay out a steady return over a long period of time,” says Tim Gee a London based partner at law firm Baker & MacKenzie. “The problems would be compounded if the borrowing to finance that project was in a different currency, say dollars, and US interest rates were to rise, as expected,” he said. Standard Chartered Greater China FX strategist Eddie Cheung said the falling pound was unlikely to have much of an effect on the bulk of Chinese companies in the UK as they were likely to be operating in many other places. “A falling pound does provide opportunities however for Chinese and Hong Kong companies looking to expand their operations in the UK,” he told the Post. Many Chinese investors don’t think Britain’s economic growth will take a big dip due to the Brexit fallout, said Louis Bai, China managing director with Britain’s biggest housebuilder Barratt Homes. “The plunging value of the pound post-Brexit has motivated many Chinese investors to go bottom fishing for British real estate,” Bai said, noting there had been a “dramatic surge” in the numbers of enquiries and property sales to Chinese investors from early July to late September. “For the coming two years, we anticipate an army of China’s lower middle class to scramble to buy British properties on yuan depreciation and Chinese economic downturn expectations.” Jason Wong Chun-tat, the Travel Industry Council’s chairman and director and general manager of tour agent, Hong Thai Travel Services, told the Post that the demand for Hong Kong tourists travelling to the UK had grown about 10 to 20 per cent since late August. Additional reporting by Celine Ge, Alun John and Peace Chiu.