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.
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”.
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.
“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.
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.