FX.co ★ British pound resumes downturn as Brexit raises new concerns

The aftermath of the Brexit referendum still weighs on the pound sterling. At first, the sterling took a nosedive in response to the voting outcome, and now the selling pressure intensifies on the back of further developments. Thus, the Supreme Court has rules that Parliament must hold a vote before the government initiates the process of leaving the European Union.

As stated in the judgment, Theresa May’s government will be able to trigger article 50 of the Lisbon treaty only after Parliament approves it. However, Scotland and Northern Ireland won’t be given a vote. Now Parliament has all chances to turn the situation around.

After the court decision had come into force, the pound sterling depreciated. The British currency touched a fresh low of 1.2438 against the US dollar. At the same time, the yield of 10-year bonds increased by 3 points to 1.39%. While experts say that Parliament is unlikely to stand against the citizens’ will, the process can get complicated, putting the sterling under pressure.

On the other hand, some analysts believe that the House of Lords won’t delay a decision, fearing to be restructured. Presumably, lords will do their best to avoid leaving office.