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| Pound value latest: Sterling slips ahead of Theresa May triggering Article 50 | |
| (about 1 hour later) | |
| The pound slipped against a slew of currencies on Wednesday as the Prime Minister prepared to trigger Article 50, officially kicking off Brexit negotiations. | The pound slipped against a slew of currencies on Wednesday as the Prime Minister prepared to trigger Article 50, officially kicking off Brexit negotiations. |
| Sterling was recently down around 0.3 per cent at $1.2415 having on Tuesday briefly peaked above $1.26, a seven-week high, largely as a result of investors selling the dollar on doubts around Donald Trump’s promised tax and regulatory reform. | Sterling was recently down around 0.3 per cent at $1.2415 having on Tuesday briefly peaked above $1.26, a seven-week high, largely as a result of investors selling the dollar on doubts around Donald Trump’s promised tax and regulatory reform. |
| Earlier in the day the pound fell below $1.24. It was also down against the euro, the Swiss franc and the Australian dollar. | Earlier in the day the pound fell below $1.24. It was also down against the euro, the Swiss franc and the Australian dollar. |
| Ahead of Wednesday, the pound had oscillated and many strategists agreed that it was hard to predict its course over the next few weeks. Many say that after a more than 15 per cent fall against the dollar since June’s referendum, a hard Brexit scenario is now priced in. | Ahead of Wednesday, the pound had oscillated and many strategists agreed that it was hard to predict its course over the next few weeks. Many say that after a more than 15 per cent fall against the dollar since June’s referendum, a hard Brexit scenario is now priced in. |
| But last week strategists at Deutsche Bank published an updated forecast, predicting the currency could still fall at low as $1.06 before recovering. | But last week strategists at Deutsche Bank published an updated forecast, predicting the currency could still fall at low as $1.06 before recovering. |
| Many economists’ forecasts are more optimistic than Deutsche’, but few expect the currency to recover from its post-referendum lows any time soon. | Many economists’ forecasts are more optimistic than Deutsche’, but few expect the currency to recover from its post-referendum lows any time soon. |
| "We’re in for a long period of volatility for the pound and UK assets as the government embarks on protracted and hugely challenging Brexit negotiations," said Neil Wilson, an analyst at ETX Capital. | "We’re in for a long period of volatility for the pound and UK assets as the government embarks on protracted and hugely challenging Brexit negotiations," said Neil Wilson, an analyst at ETX Capital. |
| "We could see it move lower still if negotiations take a sour turn - $1.10 is feasible," he said. | "We could see it move lower still if negotiations take a sour turn - $1.10 is feasible," he said. |
| UniCredit strategists said that "political debate at home and negotiations with Brussels are [...] not expected to be smooth". | UniCredit strategists said that "political debate at home and negotiations with Brussels are [...] not expected to be smooth". |
| On Wednesday, some traders said that selling pressure might also be stemming from the Scottish parliament on Tuesday voting in favour of a second independence referendum. | On Wednesday, some traders said that selling pressure might also be stemming from the Scottish parliament on Tuesday voting in favour of a second independence referendum. |
| Separately, Bank of England interest rate-setter Ian McCafferty on Tuesday highlighted a weak outlook for the economy, according to Reuters, and said he did not know if he would vote in favour of increase borrowing costs at the Bank’s meeting in May. | Separately, Bank of England interest rate-setter Ian McCafferty on Tuesday highlighted a weak outlook for the economy, according to Reuters, and said he did not know if he would vote in favour of increase borrowing costs at the Bank’s meeting in May. |