The British pound made significant gains against major currencies as Theresa May, the UK’s prime minister confirmed that the country will opt for a hard Brexit. The British pound gained almost two cents against the US dollar and also recorded significant gains against the euro and the Japanese yen.
The British pound started the day weaker, but May’s speech triggered a major rally for the pound as the markets reacted positively to May’s 12-poin Brexit plan. The pound opened trading on Monday with a significant drop after Theresa May’s speech was leaked to the media on Sunday and it became clear that the PM would be announcing a hard Brexit.
The pound’s rally was driven by positive market sentiment and investor confidence in the UK economy post Brexit. The 12-point plan outlined by PM May gave clear direction to the markets regarding the UK’s future policies regarding immigration, and economic ties to the European Union.
The pound’s rally can also be attributed to the positive comments made by Mark Carney, the Bank of England Governor, who gave a speech regarding the readiness of the bank to tackle uncertain markets on Monday.
The markets will be looking at future events across Europe and policy announcements by the ECB as the pound’s performance is largely linked to the euro.
The GBP/USD was trading at 1.2381 as at 18:40 GMT having opened trading at 1.2038. The EUR/GBP was trading at 0.8641 having opened the day’s session at 0.8804. The GBP/JPY was trading at 139.95 having opened at 137.37.
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