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Analysts at Scotiabank noted that GBP had been strong vs the USD on Monday and was outperforming all of the G10 currencies as it retraces a portion of last Friday’s impressive 1.5% Brexit-driven decline.  

Key Quotes:

“Local media are reporting of a possible snap election in November and the Labor party is offering hints of support for a second referendum. All eyes are on PM May’s leadership prospects heading into next week’s Conservative party conference.”

“The latest CFTC speculative positioning data have revealed a reduction in both gross long and gross short positions while pushing the net to a fresh multi-year short. Risk reversals are pricing a sizeable premium for protection against GBP weakness vs. both the USD and EUR.”