GBP/USD slips back below 1.2800 as vote of no confidence gets underway

• Sorry state of UK politics over the Brexit deal continues to cap the upside.
• Remains vulnerable amid no-confidence vote and ahead of US data.

The GBP sellers returned to the markets following the UK PM Theresa May’s radio appearance and on fresh UK political headlines, sending the GBP/USD pair back below the 1.28 handle

UK: Vote of no confidence? – Deutsche Bank

The Cable stalled its steady recovery mode and reversed sharply last hour after the upbeat comments by the UK PM Theresa May left the bulls unimpressed, as her cabinet still remains in the Limbo, with no Brexit Secretary appointed as yet and markets wary whether she would stand the no-confidence vote, now underway, as a Conservative party leader.

The UK political storm will continue to weigh negatively on the domestic currency, with every bounce likely to be sold-off, as a no-deal Brexit appears to be the most likely scenario the UK is headed for.

Further, Thursday’s awful UK retail sales data combined with the money markets pricing out a 2019 BOE rate hike also remains a GBP-negative. However, the losses remain capped so far amid a better tone seen on the European equities and a broadly lower US dollar, as the focus now shifts towards the US industrial output data due later in the NA session. In the meantime, the Brexit-related headlines will continue to remain the exclusive drivers for the spot.

GBP/USD Technical Levels