Pound falls after Brexit Article 50 date announced

Sterling took another knock on Monday after Theresa May's announcement that the Government will trigger Article 50 by March 2017.

Picture: John Devlin
Picture: John Devlin

The pound fell 0.5% against the US dollar in morning trading to stand at 1.28 dollars. Against the euro, sterling was also down, by 0.1% to 1.14 euros.

On Sunday, Mrs May said at the Conservative Party conference that the two-year process of negotiating Brexit under Article 50 of the EU treaties will start by the end of March 2017, putting the UK on course for a “hard Brexit”.

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This would see Britain lose access to the European single market as part of plans to clamp down on immigration.

FXTM chief market strategist Hussein Sayed said: “The pound’s imminent reaction was a drop of 0.5% against the dollar in early Asian trading session, nothing compared to the 11% freefall after the UK’s vote to leave the EU on June 23.

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“Now with the timeline being set, the negotiation of the terms will be a key driver for sterling going forward, but I expect it to be rough ride in the next few months.”

To compound matters, Chancellor Philip Hammond has warned that Britain’s economy is heading for a “rollercoaster” ride over the coming years during negotiations to leave the European Union.

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Mr Hammond said the expected “turbulence” has forced him to tear up predecessor George Osborne’s plan to bring the national finances into surplus by the end of the decade.

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