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Sterling Sinks as EU Pull Trigger on Legal Action


Despite trading constructively for much of the week, GBP sank sharply this morning as the EU formally issued notice to the UK government of the first step of a legal infringement process after the deadline on the UK's Internal Market Bill lapsed yesterday. The EU's judgement that the UK are running counter to international law sent GBP sliding, with hopes of a trade deal skeleton deal in place by the end of this week looking increasingly unlikely. GBP/USD sank well over 100 pips, hitting lows of $1.2820. This leaves GBP comfortably the worst performer in G10 Thursday.

Equities in Europe trade mixed, with UK markets outperforming on GBP weakness while the EuroStoxx50 lags and sits in minor negative territory. US equity futures are slightly higher, indicating a positive open on Wall Street later today. NOK is the strongest currency in G10 for a second session.

Weekly US jobless claims and the Manufacturing ISM release for September are the data highlights. Central bank speakers today include BoE's Haldane, ECB's Lane and Fed's Williams, & Bowman.

MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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