- EUR/GBP regains the 0.91 level and beyond.
- Political uncertainty, Brexit woes weigh on the Sterling.
- Rumours of general elections remain on the rise.
The unabated selling mood around the British Pound is giving extra legs to EUR/GBP, pushing it to new two-week highs above the 0.91 handle.
EUR/GBP focused on UK politics
The Sterling is suffering further the rising uncertainty in the UK political scenario, falling to two-week lows vs. the single currency and to nearly two-year lows vs. the Greenback.
In fact, opposition MPs are expected to put forward a bill to stop a ‘no deal’ outcome at the October 31 deadline. This scenario should force PM B.Johnson to request another Brexit delay, likely to end of January 2020.
However, PM B.Johnson has already stressed that if the government is defeated in the next hours, he would put forward a motion to call for general elections on October 14th.
In the data space, UK Construction PMI and Producer Prices in Euroland will be the only publications today.
What to look for around GBP
The recent move by PM Boris Johnson to suspend Parliament has given way to heightened uncertainty in UK politics and boosted odds of a ‘no deal’ scenario on October 31. The next hours should probe vital for the Sterling amidst increasing market chatter on general elections, a ‘no confidence’ motion against PM B.Johnson and desperate efforts from MPs to block a potential ‘no deal’ outcome. On another direction, the BoE keeps the ‘radio silence’ regarding Brexit. It is worth recalling that, at its last meeting, the central bank refused to incorporate the likeliness of a ‘hard divorce’ scenario to its projections.
EUR/GBP key levels
The cross is gaining 0.60% at 0.9138 and faces the next hurdle at 0.9148 (high Sep.3) followed by 0.9183 (high Aug.20) and finally 0.9324 (2019 high Aug.12). On the other hand, a drop below 0.9016 (low Aug.27) would expose 0.8913 (100-day SMA) and then 0.8891 (monthly low Jul.25).
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