The U.K. pound remained sharply lower in early Asia trade Monday as investors fretted over the likelihood of a hard Brexit scenario ahead of a key speech by U.K. Prime MinisterTheresa May.
Ms. May is expected to elaborate on the U.K.’s priorities in negotiations over its exit from the European Union in a speech Tuesday. Several British newspapers reported that Ms. May will emphasize that the U.K. will leave the EU’s single market to regain control of immigration policy.
The pound fell as much as 1.6% against the dollar and 1.9% against the Japanese yen following the reports, but came off these lows in early Asian trade. At around 1:10 a.m. Greenwich Mean Time, the pound changed hands at $1.2051 and ¥137.76, down 1.1% against both currencies from late Friday in New York. The euro was trading around £0.8821 after jumping to £0.8852.
Still, not everyone was fully buying into the picture of doom and gloom.
Stephen Innes, senior currency trader at OANDA, cautioned against taking statements on the negotiations at face value.
“Negotiations of this size and importance are bound to involve an element of bluff to ensure that the U.K. would get the best possible deals,” he said. “Without actual confirmation of these ‘hard’ measures, we could be viewing little more than ‘sell the rumour’ and we may end up buying the fact.”
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