The British pound weakened against major rivals on Tuesday to touch its lowest level since January, after UK lawmakers passed a bill from the British government that paves the way for Brexit. Investors now expect that UK Prime Minister Theresa May will trigger Article 50, which starts talks of exiting the European Union, later this month.
After discussing some amendments to the Brexit bill, the Houses of Parliament passed it as the Members of Parliament overturned the amendments that aimed to protect the rights of EU Citizens in the United Kingdom. The new bill gives Theresa Mayâs government the ability to start the formal Brexit process, which was initially expected to happen today before reports stated that the prime minister might move in the last week of March.
The pound declined even as the approval of the bill was largely priced in the currencyâs rate, as the market reacted to Scottish First Minister Nicola Sturgeonâs announcement of a Scottish independence referendum. Sturgeon views the current and future states of the United Kingdom as fundamentally different from its state when Scotlandâs last independence referendum happened in September 2014.
The Scottish first minister said that Scotland was not offered a choice between independence and Theresa Mayâs Brexit plan which, in her opinion, justifies the new referendum. Sturgeon will demand a vote in the Scottish Parliament in order to be given the ability to invoke the independence referendum, which is expected to happen within weeks.
GBP/USD traded at 1.2162 as of 17:20 GMT on Tuesday, after falling to 1.2112 at 08:10 GMT, the pairâs lowest level since January 17. GBP/USD was at 1.2208 at the beginning of the day. EUR/GBP was at 0.8740, from 0.8781 at 08:10 GMT, the pairâs highest level since yesterday. EUR/GBP started trading today at 0.8724.
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