The pound has tanked to three-week lows as BoE member Michael Saunders opened the door to a rate cut by the central bank.
The comments from Saunders highlight the marked weakening of the UK economy over recent quarters; dragged down not only by Brexit uncertainty but also softer global growth.
Even if the UK did manage to pull the rabbit out the bag and leave the EU with a deal, the elevated levels of uncertainty are unlikely to end there. Uncertainty over future trade agreements with the EU and other countries could leave companies in the lurch and unsure how to prepare for the different possible outcomes of those trade agreements.
Levels to watch GBP/USD:
The pound dropped 0.3% and is trading at three-week lows. A break below $1.23 has set the stage for further depreciation to $1.2270. A breakthrough here could see the pair slip back towards $1.22. On the flip side, resistance can be seen at $1.2370 prior to $1.2400.
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