Monitoring Desk<\/p>\n
The act of triggering Article 50 is the event that investors have been waiting for
\nAll eyes will be on sterling this week as speculation mounts that Prime Minister Theresa May is poised to trigger Article 50, formally starting the two-year countdown to Britain\u2019s divorce from the EU.
\nThe act of triggering Article 50 is the event that investors have been waiting for. They\u2019ve eagerly been speculating how much impact\u2014 if any\u2014 it will have on the already battered pound.
\nSterling has endured a bumpy ride in recent months.
\nThe currency is down about 18 per cent against the dollar since the EU referendum in June, with declines since the initial aftermath of the Brexit vote mainly sparked by concerns that the UK is heading towards a hard Brexit – in which access to the EU\u2019s single market would be sacrificed in favour of tighter control over immigration.
\nCurrency experts believe sterling is going to be volatile when negotiations kick off, although many predict it might not be a shock event.
\nNeil Wilson, senior market analysts at ETX Capital, said the reality of Brexit has already been priced into the currency.
\n\u201cA lot of the downside is baked in already \u2013 the actual triggering of Article 50 shouldn\u2019t do too much,\u201d he said.
\nEconomists at Morgan Stanley also believe the triggering of Article 50 shouldn\u2019t deal a major blow to the currency.
\n\u201cThere may be many Article 50-related news headlines in the coming weeks but we believe that a lot of the negativity around Brexit-related economic data weakness is already in the price,\u201d strategists said in a March 2 note.
\nA poll of more than 60 banks and research institutions conducted by Reuters that was released earlier this month also predicts that there will be no dramatic sterling moves once Article 50 is triggered, however those questioned also do not think that the the currency is about to recover sustainably.
\nMost economists predict the pound will trade at $1.23 against the dollar by the end of June, and drop to $1.21 in the subsequent three to six months. A widely expected increase in US interest rates on Wednesday could also favour the dollar over sterling in coming months, accentuating the pound\u2019s weakness.
\n“Though the dollar was down against peers this [on Monday morning], its overall strength looks likely to continue, especially if the hawkish Fed embarks on the rate hike,” Paresh Davdra , chief executive and co-founder of RationalFX said.
\nSome economists are even more pessimistic.
\nAnalysts at Danske Bank earlier this month said that they expect the pound to fall to $1.19 by the end of March.<\/p>\n","protected":false},"excerpt":{"rendered":"
Monitoring Desk The act of triggering Article 50 is the event that investors have been waiting for All eyes will be on sterling this week as speculation mounts that Prime Minister Theresa May is poised to trigger Article 50, formally starting the two-year countdown to Britain\u2019s divorce from the EU. The act of triggering Article […]<\/p>\n","protected":false},"author":1,"featured_media":14684,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-14673","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n