Pound tumbles ahead of Article 50 Brexit trigger
Yuan retreats after PBOC cuts the daily fixing rate
The British pound dropped sharply against the US dollar Wednesday morning, after Scottish lawmakers voted to request a second UK independence referendum.
Investors are waiting for the UK government to trigger Article 50 later in the day, which will kick off negotiations on the country’s exit from the European Union after 44 years of membership.
The pound declined 0.3 per cent to US$1.241 at 11.20am, down from US$1.245 late on Tuesday.
UK Prime Minister Theresa May will send a letter to officials in Brussels later today, invoking Article 50 of the Lisbon Treaty and beginning the formal process of withdrawal from the EU.
Any suggestions that the UK might not actually leave the EU disappeared months ago
“Article 50 could reintroduce [the ‘Hard-Brexit discount’] by making Brexit a reality and perhaps triggering a surge in media and market speculation over the final outcome of the negotiations,” said Jonathan Loynes, chief economist for London-based Capital Economics.
However, he said Brexit worries may be short-lived, as the news had been long expected by the markets.