GBPUSD, H1
The UK Cabinet agreed the Brexit divorce document (all 585 pages of it) following a 5 hour meeting. However, the agreement was “collective” and not “unanimous” and the initial rally in Cable to 1.3072 has cooled and slipped under 1.3000 in early European trades. EURGBP is up to 0.8724 and GBPJPY down under 147.50. The BBC reported overnight that 9 members the cabinet are unhappy with the document and up to 4 are considering there positions. Mrs May will present the document to parliament this morning from 10:30. The main opposition Labour party has announced this morning that they will vote against the document once Parliament votes. Finally, (for the moment) European Council President Tusk has tweeted that, “If nothing extraordinary happens, we will hold a #EUCO to finalise and formalise the #Brexit agreement on Sunday 25 November at 9h30.” The wary tone of Tusk’s tweet reflects the reality of May’s “worst of both worlds” plan, which is unpopular with significant numbers of both Eurosceptic and Europhile members of parliament. There is a risk May will face a no-confidence vote, which, in the scenario she is ousted, would leave the UK rudderless for at least several weeks while the Tories select a new leader. Even if there is no ousting, May’s Brexit plan looks to be all but doomed with her key supporters from the Democratic Unionist Party (DUP) also suggesting they will vote against.
As we go to press UK Brexit Secretary Marcus Raab announces his resignation, Cable immediately falls to S1 at 1.2888 and remains vulnerable.
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Stuart Cowell
Head Market Analyst
HotForex
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