As some expected the pound had worked out most of its negative feelings about Theresa May’s Brexit-intensions already, leading the currency to piggy-back on the less terrifying aspects of the Prime Minister’s announcement for some rather impressive gains.
The main driver of sterling’s growth was the news that the government’s Brexit deal will go to a parliamentary vote, causing the pound to rocket 2.8% higher against the dollar and 1.8% against the euro. It shows just how desperate the currency was for clarity that May’s speech, with its firm stance on leaving the single market and vague promises of free trade and some kind of new customs agreement, could inspire such a reaction from sterling despite most of what was said being pound-negative.
Having risen so high on sterling’s slump this post-speech revival has proved to be a massive drag on the FTSE. The UK index plunged more than 1% as the afternoon wore on, taking it to its worst price in around a week. The Eurozone and US markets, in contrast, benefited from the pound’s strength; the DAX managed to recover all its earlier losses to sit flat around 11560, while the Dow Jones ticked 15 points higher having promised to opened around 40 points lower during the morning.