Dubai: The British pound hit its lowest level in one-week on Wednesday after the UK officially triggered Article 50 to leave the European Union.
The pound fell as much as $1.2377 earlier in the session, before trading 0.32 per cent lower at $1.2406.
“The currency market would be very volatile. The element of surprise would come from Tusk regarding the terms to start the re-negotiations,” said Naeem Aslam, chief market analyst with Think Markets. “The next 48 hours are what traders are anxious about because they are not sure how that will go.”
Donald Tusk is the president of the European Union and the negotiations on the terms of the separation over the next two years. “We may see a level $1.10 [in Pound] if all goes into jeopardy,” Aslam said.
Developing trend
“If you are a passive investor and do not have the stomach for excessive risk, then maybe better to stay on the sideline and wait for the trend to develop,” Aslam said.
The UK FTSE 100 was 0.11 per cent lower at 7,335.32. Sentiment was negative among banking stocks even as some banks decided to move a few hundreds of their employees outside London last week.
“The sell off in banking is obvious. There would be no stop in selling in financials,” said Aslam.
In the US, the Dow Jones Industrial Average was 0.25 per cent lower at 20,649.63, while the S&P 500 index was down 0.19 per cent at 2,354.21. Meanwhile, global stocks remain on course for a fifth straight month of gains as the reflation trade triggered by Trump’s election proves its resilience.
Elsewhere in Europe, stocks remained mixed. The German DAX was up 0.54 per cent higher at 12,215.22. The CAC index was 0.40 oer cent higher at 5,056.50.
In commodities, Brent crude was up 0.31 per cent at $51.49 per barrel. West Texas Intermediate was also up 0.19 per cent at $48.46 per barrel. Gold was up 0.11 per cent at $1,253.25 an ounce.
