ICM: Raab's Resignation Triggers Pound Shorts

The British pound collapsed against major currencies as Dominic Raab resigned from being the UK Brexit Secretary. His main reason for resignation is that he cannot support an indefinite backstop arrangement. The cable was on the back foot since the opening of the European trading session due to oppositions to May's Brexit deal, despite winning the approval of the divided Cabinet yesterday. Those developments will make it harder for May to win the parliamentary approval and could lead to one of these three outcomes: No Brexit Deal, General Elections, or Second referendum. This uncertainty will force the Bank of England to delay further monetary policy tightening measures. The GBPUSD fell to a six-week low of $1.2810, and the GBPJPY tumbled to a two-week low of 145.23, and the GBPNZD dropped to an eleven-month low of 1.8976.

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