LONDON – The pound dipped lower this morning after the Supreme Court ruled on Tuesday morning that the government must allow Parliament to vote on the triggering of Article 50.
One of the most important legal cases in British history reached its conclusion when the majority of the Supreme Court’s 11 justices ruled that Theresa May must secure parliamentary approval before triggering Article 50 and initiating the country’s formal departure from the European Union.
The ruling was handed down at around 9.30 a.m. GMT (4.30 a.m. ET).
The pound slid by around 0.2% in the run-up to the ruling, and dropped by a further 0.5% immediately afterwards.
After a brief rally, the pound is currently down at the day low. As of 11.00 a.m. GMT, it has fallen by over 0.7% to trade at $1.2441:
While the cause of the drop is not entirely clear, it may have reflected the Supreme Court's ruling that the devolved parliaments of Scotland, Wales, and Ireland will not be able to vote on triggering Article 50 - which some investors appear to have been pricing for.
David Cheetam, market analyst at XTB, said:
"The pound has come under some selling pressure in the wake of the Supreme Court ruling, largely due to the fact that the government doesn't have to consult the Scottish, Welsh or Northern Irish assemblies before triggering Article 50.
"The appeal itself was rejected, but it still remains likely that Mrs. May will meet her self-imposed deadline of beginning the formal Brexit process by the end of March.
"Sterling has been volatile over the announcement, with initial moves back above 1.25 against the dollar quickly fading and the market trading down to its lowest level of the day."
After falling to its post-Brexit vote low earlier in January, Sterling has rallied in recent days, bolstered by a combination of factors, including a fall in the dollar triggered by worries about President Trump's future policies.
That fall in the dollar coincides with strength from the pound after Prime Minister Theresa May finally gave the markets a tiny bit of clarity on the UK's position going into Brexit.
May confirmed Britain will leave the European Single Market, signalling Britain is heading towards a "hard Brexit" - shorthand for an EU exit that takes the country out of both the European Single Market and Customs Union in order to gain full control over EU immigration to the UK.
Footsie rally
The FTSE 100 rallied following the announcement, as many companies on the index are based abroad and have holdings in foreign currencies which benefit from a falling pound.
As of 10.55 a.m. GMT the index is up 0.28% on the day, trading at 7,172 points:
