The British pound moved lower on Thursday on increased concerns about a speech British Prime Minister Theresa May will give next week. Traders worried that Mayâs speech, which was announced today, will suggest a hard Brexit for the United Kingdom.
The scheduled speech comes after May said earlier this week that the UK would not keep bits of its membership in the European Union once it leaves the bloc. Her comment sparked fears that the UK will give up its access to the European single market in exchange for a full control over its borders to limit immigration.
This scenario, which is commonly known as hard Brexit, will force British companies and producers that depend on European imports and services to face a sudden interruption to their operations. Recent comments made by May seem to point to the direction of a hard Brexit, which is weighing down the British currency.
Traders are also anticipating a decision by UK Supreme Court in the coming days. The court will decide whether it will uphold a ruling by UK High Court in 2016 that required the government to get parliamentary approval before triggering Article 50.
GBP/USD traded at 1.2153 as of 20:05 GMT on Thursday, after starting trading at 1.2201. The pair touched 1.2306 at 08:45 GMT, its highest level for the day, before moving gradually lower for most of the day.
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