One way traffic for Sterling - GBP was sold...>

FOREX: One way traffic for Sterling

- GBP was sold from the off and markets kept the pressure throughout Monday

trade to send GBP/USD back below $1.30. The PM's more belligerent stance with

Brussels is seen by the market as having raised the risk of the UK sliding on

WTO terms of trade after Dec31 this year, with weekend press suggesting Johnson

would abandon trade talks if he doesn't agree with the terms offered by

Brussels. The move erased the Thursday/Friday gains and sees bears target the

100-dma support at 1.2880.

- CAD was also sent spiralling as oil prices fell sharply. Both WTI and Brent

crude futures hit multi-year lows Monday, as markets suspect OPEC's planned

production cuts will be insufficient to shore up energy prices. NOK also fell in

sympathy. The USD and US equities found some support from better-than-expected

ISM Manufacturing data, which countered some of the poor sentiment figures out

last week.

- The RBA decision takes focus, with analysts and markets split on whether the

bank cut rates this month. US December factory orders are also due.