GBP tumbles through 1.3200 as parliament clashes on Article 50 extension
This (early) afternoon's PMQ (Prime Ministers Questions) session has revealed clear divisions with the House of Commons, as the cabinet's decision to extend Article 50 for a short period is seen as a breach of trust by hard-line Brexiteers, while more Remain friendly MPs do not believe the extension is long enough.
There was also a point at which the PM assured her backbench MPs that an extension of the withdrawal date does not take 'no deal' off the table, as she insists that parliament needs to vote on a deal - whatever shape or form it may take. As is stands, the PM will be travelling to Brussels to attend the EU Summit, at which time she will try and get further assurances and changes to the political declaration in order to be able to resubmit her deal to the House.
As a result of this morning's events, GBP has taken a tumble and after persistent buying ahead of 1.3200, Cable has dropped below the figure and also the 1.3180 lows seen this week, finding support in and around the 1.3150 level as we suggested earlier. There is more support seen into the low 1.3100's which may also be tested later on, with FOMC volatility tonight perhaps adding to the potential for this.
EUR/GBP has pushed above 0.8600 and has now tested just ahead of the 0.8645-65 zone, which we also highlighted this morning.