Advertisement
Canada markets closed
  • S&P/TSX

    22,167.03
    +59.95 (+0.27%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • CAD/USD

    0.7381
    +0.0009 (+0.12%)
     
  • CRUDE OIL

    83.03
    +1.68 (+2.07%)
     
  • Bitcoin CAD

    96,052.80
    +2,962.61 (+3.18%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,241.60
    +28.90 (+1.31%)
     
  • RUSSELL 2000

    2,121.55
    +7.20 (+0.34%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • NASDAQ

    16,379.46
    -20.06 (-0.12%)
     
  • VOLATILITY

    13.03
    +0.25 (+1.96%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • CAD/EUR

    0.6841
    +0.0036 (+0.53%)
     

Sterling slips after Northern Ireland court rejects Brexit trigger challenge

A bank employee counts pound notes at Kasikornbank in Bangkok, Thailand October 12, 2010. REUTERS/Sukree Sukplang/File Photo

By Jemima Kelly

LONDON (Reuters) - Sterling hit an eight-day low against the euro on Friday, after Northern Ireland's High Court ruled that the law of the province did not restrict the British prime minister's ability to trigger an exit from the European Union.

The court said the consent of the regional parliament was not required to trigger Article 50 - which kickstarts UK-EU divorce proceedings.

A similar case has been taken to the High Court in London, with campaigners arguing the government does not have the authority to trigger Article 50 without the explicit support of parliament. The Northern Ireland High Court said its ruling related only to Northern Ireland law, and would not prejudice proceedings in the English case.

ADVERTISEMENT

Sterling slipped to 90.125 pence per euro (EURGBP=D4) after the news, its weakest since Oct. 20, before recovering to 89.94 pence per euro by 1445 GMT, a 0.4 percent drop on the day. It also fell half a U.S. cent to a three-day low of $1.2123 (GBP=D4), before recovering to trade flat at $1.2169.

"This is a different court case to the one taking place in the English High Courts of course, so it's not over yet folks," said Nomura currency strategist Jordan Rochester. "However, the market will be reading into this as an indication as to how the other case may develop."

Sterling has lost almost a fifth of its value against the dollar since the June 23 vote for Brexit, and there had been worries that the economy would also take an immediate hit as foreign investment dried up and consumers lost confidence.

But data on Thursday showed the economy grew 0.5 percent in July, August and September, with growth accelerating to 2.3 percent on an annual basis - the strongest pace in more than a year. (ECONGB)

Though the numbers gave sterling a brief fillip, sending it to a one-week high of $1.2273, the currency closed the day more than a cent lower than that.

"Politics this month has really taken precedence over the economic data ... sterling appears to be looking ahead into what still is a cloud of political uncertainty," said Rabobank strategist Jane Foley.

Sterling is on track for a more than 6 percent monthly fall against the dollar - its weakest performance since June - after having fallen only gradually between July and September.

Next week's Bank of England inflation report and monetary policy committee (MPC) meeting were also in focus.

In early September, the BoE said it was likely to cut rates again this year if the economy slowed.

But sterling's weakness, a rise in inflation expectations and the latest growth data have prompted most to rule out a cut on Thursday. Around three quarters of the 60 economists polled by Reuters in the latest poll expect rates to stay at 0.25 percent for the rest of the year.

(Editing by Jon Boyle)