Broader Themes & Local Matters Weigh On GBP

Cable trades ~20 pips lower on the session, printing $1.3225, as the broader risk-negative backdrop combines with some idiosyncracies to weigh on GBP.

• Continued political woes for PM Johnson (the resignation of Brexit Minister Lord Frost, growing discontent with the PM from within his own party, trailing the labour party in opinion polls & further signs of Tory officials, including himself, flouting some of the COVID restrictions that have been in place) in addition to the prospect of announcements re: deeper COVID restrictions in the coming days (Health Sec. Javid did not rule out such a move before Christmas, while the Times has pointed to a 2-week circuit breaker post-Christmas, whereas the Telegraph pointed to the potential announcement of warnings for household mixing over the Christmas period) have dominated weekend press reports.
• Technically, bears now look to the Dec 8 low ($1.3163), while bulls need to reclaim the Dec 16 high ($1.3374).
• There isn’t much in the way of meaningful UK data to drive the GBP during the remainder of the pre-Christmas period.