Analysts at Scotiabank explained that GBP was served a dose of reality on two fronts over the weekend.
Key Quotes:
“GBP was served a dose of reality on two fronts over the weekend with EU Brexit negotiator Barnier “savaging” (in the words of one paper) PM May’s Chequers Brexit plan and former Foreign Minister Johnson taking aim at the PM for her negotiating position.
It’s hard to see where PM May goes from here; her basis for negotiating Brexit with the EU is unworkable with Brussels and unacceptable to a significant part of her own party. The GBP has held up relatively well today so far but we view “hard Brexit” risks as significant and perhaps rising incrementally now and this will keep GBP gains in check.”
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