The Pound Struggles

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.”

Wall Street Journal

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.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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