Yesterday, the continued blood-letting on GBP pairs resumed, with GBPEUR falling by another -1.15% and GBPUSD by -1.50% , with both opening lower again this morning. As a monthly overview, that’s -2.65% against the euro and an enormous -4.20% versus the dollar with both primed to continue in the same fashion throughout today should Brexit headlines dominate again.
As mentioned in previous blogs, Q4 was always going likely to kept for no-deal contingency planning – this week Boris Johnson confirmed those sentiments and the sterling response is an obvious one: headlines harm the pound when it comes to Brexit. The fact that GBP pairs were as high as they were, despite a large part of that being due to risk-on sentiment globally due to the long rally in the US stock markets; sterling simply had no business being as high as it was and now the writing is on the wall, and has a long way to fall.
Today could see a possibly acceleration of losses for the pound, as the controversial Internal Markets Bill is set to be announced in Parliament – with the plans already being decried as being in conflict with international law, as the Withdrawal Agreement covered the parts the new bill seeks to changes months ago. Today’s planned changes will be inspected closely by the markets and sterling will likely respond in line with how the details reflect in the chances of Britain securing a nail-biting last minute deal before the 15th of October.
Have a great day.
Author: Joshua Haden-Jones, Senior Relationship Manager
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