The Pound has had its worst day in two months yesterday, with exchange rates against most of its major currencies now reaching a two month low, and Swiss Franc exchange rates reaching down to the much dearer end of the 1.20’s once more.
Theresa May’s comments yesterday were inflammatory but still fairly vague. She gave little away but markets were all collectively worried enough about the potential reaction that this caused a run against the Pound.
She made a few comments that hinted we could not pick and choose individual aspects of the Brexit that suited us, and, which was suggestive that we were heading towards a harder Brexit than some of their recent rhetoric has suggested.
David Davis, the Brexit Secretary, had previously said that it was likely the UK would continue to pay for preferential access to the single market only a month ago in a deposition to Parliament. It seems markets are given two sides to the same story. Davis is showing the aims for Parliament, and May is posturing as part of the pre-negotiation phase.
However, similar posturing comments from the likes of French President Francois Hollande and the German Chancellor Angela Merkel in quick succession caused a complete flash crash on the Pound. GBP/CHF fell by more than 5 cents on the day.

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