Sterling slips as investors brace for May Brexit speech
- Buz Investors Sterling slips Sterling slipped on Thursday after a spokeswoman said British Prime Minister Theresa May will give a speech next week on her plans for leaving the European Union, which sparked fears that she would suggest Britain will undergo a “hard Brexit”.
- Sterling skidded to its lowest levels for almost 32 years -excluding a “flash crash” in October – this week, after May said over the weekend that Britain would not keep “bits” of EU membership when it leaves the bloc.
- Investors interpreted this to mean Britain would lose access to the lucrative European single market in order to give priority to reasserting full
Sterling slips The pound had rebounded to as high as $1.2317 GBP=D4 earlier on Thursday against a dollar weakened by a lack of detail on President-elect Donald Trump‘s spending plans in his first news conference since his election on Wednesday.
But after the news of May’s speech, it slid backwards to trade at $1.2207, slightly lower on the day though well clear of Wednesday’s low of $1.2038.
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Against a broadly stronger euro, sterling fell 0.9 percent to its weakest in almost two weeks, at 87.34 pence EURGBP=D4.
“If you were to look back at recent performances, it’s rare that she’s said anything that’s been taken positively, so the risk – if you had to go one way or another – is that she again pushes the market in the direction of a relatively hard exit, which is not a positive for the currency,” said RBC Capital Markets currency strategist Adam Cole.
Traders are also awaiting a decision – expected in the coming days – from Britain’s Supreme Court on whether to uphold a High Court ruling last year that said May’s government needed parliamentary approval before triggering “Article 50”, which will formally kick off Brexit negotiations with Brussels.
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