European shares drifted lower on Wednesday, while sterling battled back from a one-week
low and regained its composure amid the drama of Britain formally
triggering its exit process from the European Union.
The
pound was the biggest loser on major currency markets as European
trading got underway. But it clawed back almost all its losses after a
draft EU document made no mention of the possibility that the two sides
will fail to strike a deal.
Prime Minister Theresa May will notify EU Council President Donald Tusk in a letter that Britain really is quitting the bloc it joined in 1973, pitching the United Kingdom into the unknown and triggering years of uncertain negotiations.
The start of the formal Brexit process comes a day after the Scottish Parliament backed a bid to hold a second independence referendum that could break up the UK, adding another layer of uncertainty for investors to navigate.
"Sterling will be incredibly sensitive to negotiations and will offer a clear gauge of how things are panning out. We could see it move lower still if negotiations take a sour turn - $1.10 is feasible," said Neil Wilson, senior markets analyst at ETX Capital.
Sterling hit a one-week low of $1.2378 GBP= earlier, but was last trading down 0.1 percent against the dollar at $1.2432.
Elsewhere in currencies, the euro was down a fifth of one percent at $1.0793 EUR= and the dollar was down slightly against the yen at 111 yen JPY=.
Prime Minister Theresa May will notify EU Council President Donald Tusk in a letter that Britain really is quitting the bloc it joined in 1973, pitching the United Kingdom into the unknown and triggering years of uncertain negotiations.
The start of the formal Brexit process comes a day after the Scottish Parliament backed a bid to hold a second independence referendum that could break up the UK, adding another layer of uncertainty for investors to navigate.
"Sterling will be incredibly sensitive to negotiations and will offer a clear gauge of how things are panning out. We could see it move lower still if negotiations take a sour turn - $1.10 is feasible," said Neil Wilson, senior markets analyst at ETX Capital.
Sterling hit a one-week low of $1.2378 GBP= earlier, but was last trading down 0.1 percent against the dollar at $1.2432.
Elsewhere in currencies, the euro was down a fifth of one percent at $1.0793 EUR= and the dollar was down slightly against the yen at 111 yen JPY=.
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