GBP/USD eased after today's unexpectedly strong U.S. CPI and reports the U.S. would delay new tariffs on Chinese imports reduced betting on Fed rate cuts, suggesting any improvement in risk sentiment will keep pressure on cable. Diminishing global growth issues will push Brexit back into the spotlight as Britain's Oct.
31 deadline to leave the EU approaches -- and with UK officials apparently no closer to achieving a new deal to smooth the transition. Though PM Johnson emphasized the importance of a free trade deal "with our friends and partners over the Channel" the EU has been steadfast in its resolve that the existing withdrawal agreement is its best and final offer.
With hopes for a Brexit deal dwindling the full gamut of options for the UK remain in play, general elections , a second referendum or a further delay.
All of which are likely in the short-term to be UK and GBP/USD negative as they inject substantial uncertainty in the UK growth and inflation outlook.
Monday's low at 1.2015 and Jan 2017's 1.1983 low remain viable near-term targets.
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