Sterling under immense pressure after Theresa May's 'Hard Brexit rhetoric'

In her speech over the weekend, UK Prime Minister Theresa May said that more detailed plans for the UK’s exit from the EU would be announced over the coming weeks. The pound slumped against most major currencies on Monday after Theresa May signalled that the UK is likely to quit the Single Market when Brexit occurs.

PM May said that the UK will look to prioritize immigration limits over keeping access to the EU’s single market, with consensus expecting May to attempt to negotiate a separate free trade agreement with the European Union.

Traders see a "hard Brexit" as bad for UK PLC as it would likely mean higher trade tariffs and would prevent service industries such as finance from selling to the European market unless a transition deal is arranged while a trade agreement is put in place. Even if tariffs do not rise and a transition deal is reached, many fear that the lingering uncertainty around Brexit will reduce trade until a final deal is worked out, which could take years.

Further aggravating the ongoing weakness, SNP’s N.Sturgeon said Scotland could invoke a second independence referendum if the UK withdraws from the single market. The pound hit a 2 month low against the dollar. Cable was trading at 1.2174, down 0.84 percent on the day.

FxWirePro Currency Strength Index showed Hourly GBP Spot was at -60.112 (Slightly bearish) at 1130 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.