Hard Brexit it is – and the currency markets don’t seem to mind

A hard Brexit, currency markets seemed to indicate yesterday, would mean an even weaker pound. How, then, to explain this afternoon’s surge in sterling, which surged from just over $1.20 to just under $1.24 within a couple of hours of Theresa May’s speech? The rise more than reversed the falls since Monday morning, when the contents of the Prime Minister’s speech first became apparent. In other words, the market for sterling seemed to fear hard Brexit, but when it got hard Brexit it turned jubilant.

Some have interpreted the rise as a reaction to Theresa May’s announcement that once the Brexit deal has been done it will be subject to a vote by both Houses of Parliament – the idea being that MPs and lords might vote down the deal and we can all go back to happily being members of the European Union.