The Pound fell below $1.20 overnight in anticipation of the British Prime Minister, Theresa May, announcing plans that Britain will “fully break out” of the EU’s single market after Brexit on Tuesday 17 January 2017, according to an article in the Financial Times. The last time the British Pound Sterling fell below $1.20 was in 1985. Today, in the currency markets, the Euro currency jumped to a nine week high against the British Pound and in Auckland, the first market to react to reports of Mrs. May’s likely approach to Brexit, the Pound hit its lowest point since October 2016’s flash crash, dropping 1.6% to $1.1986 but has continued to fluctuate as other markets have opened around the world. The global consensus is that Britain will choose a “hard Brexit” where Britain will no longer be part of the EU’s single market. In response to concerns over Britain-EU negotiations, Chancellor Philip Hammond warned that the UK would seek to undercut the EU on taxes if it was not granted good access to the single market.
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