LONDON — The pound is falling against the dollar and the euro on Wednesday morning, ahead of the beginning of the official Brexit progress later in the day.
The UK government is set to deliver a letter triggering Article 50 to the European Commission around lunchtime on Wednesday, officially beginning the two-year period for negotiating Britain’s exit from the European Union. Prime Minister Theresa May was pictured signing the letter on Tuesday evening.
While Brexit is no surprise, the official trigger is likely to bring fears about trade deals and Britain’s position in the world post-Brexit to the front of traders’ minds. As a result, sterling is suffering.
The pound is down 0.45% against the dollar to $US1.2391 at 7.10 a.m. BST (2.10 a.m. ET) and down 0.35% against the euro to €1.1476 at the same time. Here is how that looks:
Kathleen Brooks, research director at City Index, says in an email on Wednesday morning:
“The pound was the weakest performer in the G10 on Tuesday and has dropped below 1.24 as Article 50 fears and the prospect of a second Scottish Referendum start to bite and the dollar roars back to life. This could be a case of sell the rumour, buy the fact, and we stick to our view that sterling can brush off Article 50-inspired weakness and that sterling is essentially range bound as we formally kick off the process to leave the EU.”
More from Business Insider UK:
- Article 50 will be triggered today
- A Tesla employee is suing the company over claims of racial harassment and discrimination (TSLA)
- Some of the biggest hedge funds are closing — here’s what it takes to launch one today
- A revolution that’s underway in healthcare could have us thinking about X-Rays the same way we think of iPhones (GE)
- ‘This didn’t happen overnight’: Congressional committee launches investigation into American opioid producers