The pound opened lower against the USD and the euro this morning at week’s start. GBPUSD opened at 3 month lows as it opened at 1.20 and the EURGBP was at 2-month highs as it opened at 0.8836. The situation looks volatile as the Pound has since opening managed to bounce back as it recovered some strength up to the time of writing, and is likely to fill in the gap seen early into today’s session.
The earlier sell-off for the pound is likely to have been in reaction to a report, on The Sunday Times, that the British PM is likely to push for a decisive break from the single market as opposed to a softer approach. Of course it needs to be understood what damage such move would make to foreign direct investment and other Uk exports.
Later this week the British Prime Minister Theresa May is expected to give further details as she is scheduled to speak on the approach to Brexit. We are also expecting UK CPI.
The ECB will also take the limelight as it is due for a rate decision and policy communciation next Thursday. On Friday we will see the US Presedential inauguration.
