Markets

Pound slips as Brexit talks get green light

Currency tumbles as London traders sell and ‘pre-article 50 jitters’ hit market

Sterling sell-off: The activity comes a day after Scottish first minister Nicola Sturgeon signalled the start of a legal process for an independence referendum: Photograph: Chris Radburn/PA Wire

Tue Mar 14 2017 - 08:22

The pound tumbled against all of its Group-of-10 peers as London traders sold down the currency after UK prime minister Theresa May was given the go-ahead to trigger Brexit in the last week of March. The currency fell as much as 0.5 per cent to $1.2153.

During the Asian session, option-related bids under $1.2200 strikes expiring all week were filled, while macro offers between $1.2220/50 were layered, according to Asia-based traders.

“There is no particular headline, but I’m seeing early sellers out of Europe,” said Stephen Innes, a senior currencies trader at Oanda in Singapore. “I suspect more a case of pre-article 50 jitters and to a lesser degree the Scottish referendum. Risk in general is holding up so I suspect the combination of Fed policy and political uncertainty are the main culprits.”

The sell-off comes a day after Scottish first minister Nicola Sturgeon signalled the start of a legal process for an independence referendum, while the UK parliament gave May permission to start Brexit talks.

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The dollar traded in a tight range against most other major peers with turnover below average as traders held on to positions ahead of the Federal Open Market Committee two-day policy meeting starting on Tuesday.

Australia’s dollar fell after February business confidence declined though losses were stemmed by a mixed set of Chinese economic data.

– (PA)

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