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May's Brexit speech sends pound high

May's Brexit speech sends pound highThe pound climbed against the dollar, set for its biggest advance since the global financial crisis, as Prime Minister Theresa May said UK lawmakers will get a vote on the final deal for an exit from the trading bloc, Bloomberg said on Wednesday.

The currency strengthened against all major counterparts as May made the announcement in a speech laying out the government’s Brexit strategy, which involves pulling out of the EU’s single market. Sterling is rebounding from Monday’s biggest decline in a month that came after the Sunday Times reported the main substance of May’s speech without the additional detail on the parliamentary vote.

Despite its gains on Tuesday, the pound remains about 17 percent weaker since the nation opted to walk out of the EU in the June referendum. The currency’s slump since the vote has pushed up the cost of imported goods, with data released before May’s speech showing that inflation surged at the fastest clip in more than two years.

May dodged a question on what would happen if parliament rejects the deal that she manages to reach with her EU counterparts, saying only that she expects lawmakers to back it.

The pound climbed 2.7 percent to $1.2372 as of 4:11 p.m. in London and touched $1.2397, the strongest level since January 6. The currency fell to as low as $1.1986 on Monday.

The reaction to May’s speech is a marked contrast to those that followed her previous interventions, which had been seen as a trigger to sell the currency. Sterling fell following her speech at the Conservative Party conference in October, which fanned speculation she was eyeing a clean break with the EU, and dropped to the lowest level since October last week following her first television interview of 2017.
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