Following Some Recent Data, Sterling Is Heading Towards 1.3259
Sterling has taken a fresh leg lower after some potentially constructive moves today. Some of the recent UK data has been cause for optimism. However, in the background, we have the never-ending Brexit saga, which is currently revolving around the lack of progress and material solutions from the government. This is, at times, fighting itself for clear direction.
On the other side of the negotiating table, Europe is getting frustrated. In another barbed communique, the EU's Barnier has said that the backstop plan cannot extend to the whole of the UK, which effectively puts another obstacle in the way of the negotiations, despite explicitly saying that talks can and must continue. GBP has not taken the latest comments well and we saw Cable smashed back into the mid 1.3300's, but as we saw yesterday, there was strong demand here and we have once again stabilised.
EUR/GBP has wasted no time in trying to push back towards 0.8800 again, however with the prospect of a signal of an end to the QE program when the ECB meets next week, traders clearly know where the best possible routes lie in the near term....