Sterling Spikes on UK Court Brexit Ruling

The pound briefly soared this morning after the UK High Court ruled that article 50 cannot be triggered without the backing of parliament. While the ruling may be reversed when appealed at the start of December, the decision does offer hope to “remainers” that the triggering of article 50 will be delayed, but in the best case scenario, it won’t pass through parliament and the Brexit referendum will have been for nothing.

The latter is still unlikely at this stage as the political backlash could be extreme but still, this ruling does offer hope and this is why we’ve seen sterling spike up towards 1.2450 against the US dollar, while the euro has fallen back to 0.89 against the pound.



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Whether these moves can be sustained will likely depend on the details that emerge in the coming days or weeks regarding how MP’s would vote should it eventually be put before parliament. Should it become clear that MPs would respect the referendum result then I expect we’ll see the pound swiftly reverse any gains that the ruling brought.

It seems that Super Thursday started a little early today, with the Bank of England still yet to make its monetary policy announcement and release its quarterly inflation report. Then it’s over to Mark Carney to face the media and following this morning’s ruling, I’m sure there’ll be plenty to talk about.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam