Cable feeble attempt at a rally failed miserably this week, and the pair appears to be headed to 1.3000 as markets finally begin to fear the impact of Brexit.
With time starting to weigh and no serious progress on talks, the markets are beginning to fear that the prospect of a “hard Brexit” where UK leaves the EU without any deal whatsoever, could be a real possibility. This comes amidst clear signs that UK economic growth is slowing while inflation pressures persist, putting BoE in a very precarious policy position.
Meanwhile tomorrow the market will get a look at UK GDP which is expected to come in at 1.4% versus 1.5% the period prior. If the number misses, however, cable could see a test of 1.3000 as early as the end of day.
