- Posted by Shyam Gokani in Brexit, Currency, Dollar, EUR, GBP, Prime Minister, Sterling, UK
- January 13, 2017
- No Comments
Sterling slipped yesterday 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”.
Investors interpreted this to mean Britain would lose access to the lucrative European single market in order to give priority to reasserting full control of its borders to curb immigration. This scenario has come to be known as “hard Brexit” – a phrase that May herself rejects.
If the Supreme Court were to both affirm the High Court decision and rule that the government had to obtain the approval of parliament, that’s even more positive for sterling. However, the noise we’re hearing is that that’s probably not going to happen.
Therefore, if May wins the appeal we expect the pound to suffer and continue to devalue against the Euro and Dollar.
This is the pound’s worst week against the euro since the start of October. Down almost 2 percent from where it started the week.
Also against the dollar, Sterling is on course for its fifth weekly drop in the last six, having hit a three-month low of $1.2038 on Wednesday.