GBP under attack again amid slim pickings today
It is a data light session today, and in light of this, the market is gunning for the usual suspects and GBP is the target once again. Last night, the opposition parties set out a bill to take control of parliament if we are headed towards a no deal Brexit later this year, but the vote was rejected by a majority of 11 and as it stands, the default position is that the UK leaves the EU on 30 Oct if no new agreement is reached.
Boris Johnson is the firm favourite to take over the Conservative party and the PM spot, and his stance is well advertised as he is prepared to keep no deal on the table and leave the EU if they do not agree to improved terms. The withdrawal bill has been rejected a number of times, so there will need to be a new agreement in place, which looks unlikely given the limited time left until the end of Oct.
As such, GBP is under pressure again. and we are testing lower levels in Cable, where we note support at 1.2625-50 which is now set to be tested given the heightened odds of no deal.
EUR/GBP found strong support at 0.8870-75, and unless this gives way, the prospect of a move towards 0.8950-0.9000 now looks likely as the cross rate continues to grind higher on what now looks more likely on the Brexit front.