Sterling was the biggest gainer among developed-market currencies this morning, hitting a five-week high, as investors bet the Supreme Court would on Tuesday rule the British government needs parliamentary approval to trigger formal Brexit talks.
British Prime Minister Theresa May has said she will trigger Article 50 of the EU’s Lisbon Treaty – the formal means of exiting the bloc – by the end of March and believes the government can do so without lawmakers’ approval using executive powers.
The dollar fell to a 1-1/2-month low against an index of the world’s other top currencies today, after U.S. President Donald Trump struck a protectionist tone in his inauguration speech.
The speech was then followed over the weekend by coordinated protests in U.S. cities, testy exchanges between members of Trump’s top staff and U.S. media and a signal from the president that he would begin renegotiating the North American Free Trade Agreement.
People had expected some kind of repeat of his (Trump’s) victory speech in November, but it was a bit confrontational and has sparked some concerns in the markets that he is going to play hard ball.
It was quite straight forward: buy American, hire American… so it’s clear what route he is taking.