After climbing back above $1.24 for the first time since the 28th February this morning, the GBP/USD cross lost ground during this afternoon with the currency pair falling back below $1.2350.With no major economic data being released from the UK or the United States today, it would seem markets have reacted to the news that Prime Minster Theresa May plans to trigger Article 50 on the 29th March.
A spokesperson from Downing Street confirmed earlier today that May would write a letter to the European Council to officially notify the EU the UK is leaving, and hoped negotiations on the terms of future relations and the terms of the UK's exit could begin as quickly as possible.
GBP/USD graph
It is still unclear what impact Article 50 will have on the pound once it is triggered. Although it is probably safe to say it will spark some heightened volatility for all sterling crosses.
Will we see the pound rise or fall on the back of Article 50?
It depends if it has been priced into the value of the pound and how markets view it. We have known for months that Theresa May planned to trigger Article 50 by the end of March and we have also known that she plans to give up access to the single market, so it should not come as a huge shock to everyone.
If the invoking of Article 50 has been priced into the pounds value it could be a bit of a non-event. There is also an argument to say that once triggered, it will remove some of the uncertainly that has been dragging down the pound and provide markets with some much need clarity.
Do you need to buy or sell dollars?
If you have a requirement to buy or sell dollars in the coming weeks and are worried about the impact Article 50 could have on your transfer, contact me today for a free, no-obligation currency consultation.
For more information about how I can help or to find out what rate of exchange I can offer complete the contact form by clicking on the link below.
