Ford profits to be hit with 600m pound Brexit currency loss this year

Ford Motor Co, one of the biggest car-makers in the United States, has said that it will suffer a loss of $600m related to currency fluctuations arising from Britain's decision to leave the European Union.

In an interview with Reuters, Ford's European head Jim Farley said that the company had been shielded against currency headwinds from Brexit, but that its hedges will expire in the first quarter of 2017.

The pound has fallen against the dollar since the UK voted to leave the bloc in June last year, and several multinational firms have indicated price rises on the back of the devaluation.

Sterling was at its lowest level in seven years against the euro in October.

"When Brexit happened we were fully hedged for the first quarter with the stronger pre-Brexit exchange rate," Farley said. "As we enter the rest of the year, especially the second half, we now face the full effects of the weaker sterling."

"We think it could be upwards of $600m this year."

Farley added that the currency headwinds were likely to have an impact on car prices in the UK, with Ford being the region's biggest engine manufacturer, as well as its top-ranked brand by sales.

"Over time there could be a scenario where customers see higher prices (and) that's not good for consumer demand but the biggest driver for us is that (U.K.) currency," Farley warned.

Prime Minister Theresa May has said that Britain will leave the single market following its exit from the EU, with a so-called "Hard Brexit" the most likely scenario after negotiations with other European leaders.