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Pound under pressure as Theresa May prepares to trigger Article 50

The pound is under pressure as Theresa May prepares to fire the starting gun on the marathon two-year process for the UK to formally leave the EU.

Sterling slipped against the dollar and the euro in Asia early on Wednesday as traders watched the clock tick down to the triggering of Article 50 of the Lisbon Treaty by the Prime Minister.

The pound fell below $1.24 - leaving it more than half a cent lower against the greenback. It had nudged above $1.26 earlier in the week.

It was also four tenths of a penny weaker against the single European currency.

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The pound's value has collapsed against a basket of major currencies since the referendum vote last June.

The decline - by up to 20% against the dollar alone - has had several effects with the impact taking some time to be fully realised.

While it has made goods from abroad more expensive - filtering through to shop and other prices - it has also resulted in UK produce becoming more attractive overseas.

As UK holidaymakers notice higher in-resort costs while on holiday, tourism figures show a benefit from an influx of visitors to the UK - lured here by their money going further in shops, restaurants and at attractions.

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Market analysts said that some of the pressure on sterling on Wednesday was down to dollar strengthening but the shift also reflected uncertainty ahead as negotiations with Brussels on the terms of Brexit prepare to get underway.

The weakening was forecast to aid a rise in the FTSE 100 on opening. Many of its constituent companies sell their goods and services in dollars and net a currency benefit when those sales are booked in pounds.

Kathleen Brooks, research director at City Index, said: "Looking ahead it is not Article 50 that should concern the markets, but rather the response from the Europeans.

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"Two dates to watch out for include: 4 April and 29 April, when the EU's response to the UK's triggering of Article 50 and the first EU Brexit summit take place, respectively.

"This should give the market a sense of the tone of the negotiations, and whether the EU will want to work with the UK to give them a good deal, or if they want to punish them for deciding to leave.

"Obviously, the latter would be a big negative for the pound."