Cable is lower by 1.1% today to a low of 1.2828
It’s been a painful day for the pound as it is getting crushed alongside hopes of a Brexit deal. GBP/USD is heading towards a test of support from the September low @ 1.2786 but considering how expectations of a Brexit deal is quickly vanishing, it’ll be more of a pit stop before a continued dive towards the August low @ 1.2662.
Theresa May doesn’t look like she’ll be able to champion a deal in parliament this week to win approval from Cabinet ministers. And with European officials looking to rule out a November summit, she’ll likely regroup and press forward with a new agenda in the coming weeks ahead of next month’s summit to take place on 13-14 December.
That means in the meantime, expect further pressure on the pound to continue. Thin liquidity may prevail today and exaggerate some of the moves in cable – dollar bids in particular, running stops – but considering the context, I don’t see how investors/traders will be buying into the euro or pound when political risks continue to cast a massive dark cloud on both currencies as we begin the week.