Article 50 : We wait for the EU response
- Posted by currencies in Brexit, Currency, Dollar, Economy, EUR, GBP, Prime Minister, Sterling, UK, Uncategorised
- March 30, 2017
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Sterling fell against the dollar, as investors awaited responses from European leaders and considered the forthcoming negotiations between Britain and the European Union, a day after Britain triggered its exit from the bloc.
Yesterday, Prime Minister Theresa May formally began to take Britain out of the European Union in a divorce that will test the bloc’s cohesion and pitch Britain into the unknown.
The pound, which had been bouncing around earlier in the day, ticked up after May announced that Article 50 – Britain’s formal exit notification to the EU – had been triggered, but ended the day lower.
I don’t think it was too much of a surprise that we didn’t see that much reaction in sterling yesterday – markets knew it was coming.
I think we’ll see just that steady range ensuing to the end of the week, early next week as well until we get some more meat on the bones around negotiations over the next few weeks.
EU Council President Donald Tusk has promised to deliver the EU’s official response to Britain’s exit notification within 48 hours, with investors watching for negotiation guidelines that could contain clues about the EU’s stance.
Sterling has lost about a fifth of its value as Britain’s $2.6 trillion economy and London’s status as a global financial centre were seen uncertain by investors after the shock Brexit vote last year.
The pound has also been sensitive to British economic data, which has started showing mixed signs after surprising resilience in the months following the EU referendum, while talk of a fresh Scottish referendum – which threatens a breakup of the United Kingdom – has also seen investors sell sterling
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