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Jul 06 - 07:55 AM

GBP/USD - COMMENT-Will GBP/USD Be Invited To Parity Party? Bears Hope So

By Rob Howard  —  Jul 06 - 05:35 AM

July 6 (Reuters) - The risk of cable falling to 1.00 for the first time ever will grow if risk aversion remains the dominant theme in financial markets through year-end and UK political turmoil escalates.

GBP/USD fell two-and-a-quarter cents to a 28-month low of 1.1899 on Tuesday, courtesy of demand for the safe-haven dollar -- alongside a cacophony of noise about EUR/USD following in the footsteps of EUR/CHF and dropping to parity. nL1N2YM1LC

Odds quoted by Ladbrokes currently suggest there is an 88% chance of Boris Johnson being replaced as Prime Minister before 2023, with Rishi Sunak and Penny Mordaunt joint favourites to be the next Tory leader.
Sunak quit as Johnson's finance minister on Tuesday. nL1N2YN08LnL8N2XT3YPnL8N2YN14P

Cable got very close to 1.00 in 1985 -- with 1.0075 tipped as the traded low during the first quarter of that year.
The lowest level since 1985 was 1.1413 in March 2020, courtesy of the COVID-19 pandemic.

Related comments: nL1N2YN0FYnL1N2YM0NOnL1N2YI0J0nL1N2Y80FV

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Source:
Refinitiv IFR Research/Market Commentary

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