Pound FALLS as Theresa May free to trigger Article 50 and start BREXIT
THE pound has tumbled against the dollar and euro after the Brexit bill was signed off by Parliament, clearing the way for Theresa May to trigger Article 50 and begin negotiations to leave the European Union (EU).
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Britain's exchange rate was weakened as sterling fell by 0.7 per cent against the US dollar to 1.213 and 0.6 per cent against the euro to 1.139.
Sterling had initially shrugged off the imminent move by the Prime Minister, but the currency suffered from a bout of market nerves on Tuesday morning.
The pound is also under threat as Nicola Sturgeon's call for a second Scottish independence referendum could mean further uncertainty for Britain.
At the same time, the US dollar has been boosted by expectations America's central bank the Federal Reserve will this week raise interest rates.
The pound has fallen after the Brexit bill was signed off by Parliament
The pound has fallen against the dollar as the UK gears up to trigger Article 50
Despite the pound's hit from the official beginning of Brexit, the UK's top stock index the FTSE 100 lifted in trading.
It comes after the FTSE 250 hit a fresh record high on Monday.
Britain's economy has performed strongy since the vote to leave the EU last June, however the pound remains at a weaker level compared to before the referendum. Sterling is expected to react to ongoing negotiations during the two-year process, until there is clarity about how Britain will operate after leaving the EU bloc.Gina Miller threatens to take Government BACK to court
Kathleen Brooks, research director at City Index Direct, said: "The pound has taken a sharp drop in early Tuesday trading, in fairness liquidity has been thin, however, it suggests that the reality of the UK’s divorce from Europe and two years of horse-trading to agree trade deals is beginning to spook the FX market.
"The pound might be taking a knock on Tuesday morning, but the early equity futures market is predicting another positive open for the FTSE 100 on Tuesday, as Brexit and Indyref2 fears wash over stock investors.
"Even the FTSE 250, which is considered more sensitive to Brexit risks, ignored the impending triggering of Article 50 and reached a fresh record high on Monday."