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Thomson Reuters
Feb 28 - 02:36 PM
GBP/USD - COMMENT-Sell The Fact For Sterling As Hard-Brexit Fears Abate
First appeared on eFXplus on Feb 28 - 12:20 PM

It's sell-the-fact time for GBP/USD as markets finally see the turning point for hard-Brexit risks nS8N1XW07D. For the first time in several sessions nL1N20M11E, cable is moving lower as above-target U.S. economic data nUSNSDEFQK also gives the dollar a slight boost.
Wednesday's passing of MP Cooper's Amendment F nS8N1ZI014 puts a Brexit-delay vote on the table should PM May fail to get her EU-divorce deal through parliament.
Sell-the-fact makes all the more sense since even a delayed Brexit wouldn't remove longer term economic uncertainties or bring the UK and EU closer to resolving the Irish backstop issue.
Today's large option expiries, 1 bln at 1.3150 and 1.3325 also helped anchor GBP/USD, with increased selling pressure for Friday as a further 355 mln of GBP/USD expires.
GBP/USD 1-month volatility, which includes the March 29 Brexit deadline, has also fallen in the wake of Amendment F passing, hinting GBP/USD shorts may be less driven to lighten positions for fear of a messy Brexit nL1N20N08G.
UK short-sterling rates are relatively steady in the front end of the curve, though recent futures selling puts December 2019 BoE rate hike odds back above 50 percent, supporting GBP's recent strength.
GBP/USD bulls need a rise above 1.3472, June 7s high, to gain further momentum.

GBP Chart: Click here

Source:
Thomson Reuters IFR Markets

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