Sterling Loses Ground After Government Backs May’s Plan

Sterling extended its losses against the dollar in Asian trading hours on Wednesday after reversing lower from a two-month high on Tuesday.

The pair had surged as high as $1.27745 in early European session as investor confidence was partly fueled by remarks from Brexit minister David Davis that the government may be willing to pay into the EU budget in return for access to the single market. The rally was also spurred by expectations that the government would lose a court battle to begin the formal process for leaving the EU without parliamentary approval.

However, the government has stated that parliament should respect the result of the June referendum and showed signs of support to Prime Minister Theresa May’s intention to invoke Article 50 by the end of March next year. This means investors’ hopes that Brexit might be delayed have been damped.

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