Investing.com - The pound fell to the day’s lows on Tuesday as a ruling that British Prime Minister Theresa May must seek parliamentary approval before triggering the process to exit the European Union looked unlikely to hamper the government’s plans.
GBP/USD touched lows of 1.2439 and was last at 1.2472, off 0.47% for the day.
The Supreme Court ruled by 8 votes to 3 that the government will need to seek approval from parliament in order to trigger Article 50 of the Lisbon Treaty to begin the formal process of withdrawing from the EU, known as Brexit.
The court also ruled that the government does not have to consult the devolved parliaments of Scotland, Wales or Northern Ireland before triggering article 50, removing a possible hurdle to Brexit.
Downing Street said the decision was not expected to change the government’s plans to trigger article 50 by the end of March.
“It’s important to remember that parliament backed the referendum by a margin of six to one and has already indicated its support for getting on with the process of exit to the timetable we have set out,” a spokesperson said.
The pound was also slightly lower against the euro, with EUR/GBP up 0.24% at 0.8608 from around 0.8595 earlier.
Also Tuesday, data showed that the U.K. budget deficit was slightly larger than expected in December.
Public sector net borrowing decreased by £0.4 billion to £6.9 billion last month, compared with a year earlier, the Office for National Statistics said.
But a downward revision to November’s deficit figure means that Chancellor Philip Hammond now looks more likely to hit his borrowing target for the full year.
Meanwhile, the dollar backed away from seven-week lows against a basket of the other major currencies, but concerns over U.S. President Donald Trump’s protectionist economic policies continued to weigh.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.33% at 100.28, after falling to 99.88 overnight, its lowest since December 8.
On Monday, Trump formally withdrew the U.S. from the Pacific Rim Trans-Pacific Partnership (TPP), distancing America from its Asian allies.
He also said he intends to renegotiate the NAFTA free trade agreement between the U.S., Canada and Mexico.
The fall in the dollar reflected concerns over a lack of clarity on Trump’s economic policies and fears that his protectionist stance could hit corporate profits and act as a drag on growth.