UK Prime Minister Theresa May called a special press conference at 10:15 GMT. This is totally unscheduled and according to rumors, she might call snap elections to parliament, taking advantage of LAbour’s disarray.
Various opinion polls put May’s Conservatives with over 40% support and Labour under 30%. However, she previously ruled out bringing forward the elections from 2020.
Update: May announces UK elections on June 8th – GBP/USD recovers
More: 5 reasons why the UK elections should be pound positive
Elections to increase the majority?
Some have called for fresh elections in order to allow for a new parliament to discuss the details of Brexit. While nobody doubts the vote to desire of Brits to leave the EU, it is not clear what voters really want. Is it a hard Brexit that May currently leads? Or rather a softer one?
A hard Brexit favors more UK sovereignty and control over borders and immigration over access to the single market and trade. A soft Brexit leans towards the “Norwegian model” – staying officially outside the EU while obeying the rules and enjoying the obligations as if it were a full member.
GBP/USD falls on the rumors and uncertainty
GBP/USD is tumbling down on the uncertainty. Cable is currently trading at 1.2528, after having reached 1.2515. Earlier in the day, the pair was trading steadily closer to 1.26.
Support awaits at 1.2460 and 1.2350. Resistance is at 1.26 and 1.2790.
More: EUR/GBP The Brexit pair has room to the downside – two opinions
Here is how it looks on the chart:
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