GBP/USD: pressured on Brexit and sentiment is dominant - Scotiabank

Analysts at Scotiabank explained that GBP is underperforming and testing fresh multi-month lows at levels only briefly observed in early July with pressure driven by the response to Sunday’s speech from PM May in which she communicated an intention to invoke Article 50 by the end of March 2017.

Key Quotes:

"Sentiment is dominant and yield spreads are delivering added pressure. Uncertainty is elevated and risk reversals are pricing a greater premium for protection against GBP weakness. The stronger than expected manufacturing PMI release (55.4 vs. 52.1 exp. & 53.4 prev.) has delivered a minor intraday bounce. This week’s domestic releases include Wednesday’s services PMI and Friday’s industrial production and trade."