(15 NOVEMBER 2018)DAILY MARKET BRIEF 2:Pound sinks in Brexit chaos

The pound’s plunged 1.5% this morning, as uncertainty over Brexit soared. Yesterday, the UK Cabinet approved a 585-page deal drawn up with the European Union. Today, however, the UK’s Brexit Minister – Dominic Raab – resigned, saying he “cannot in good conscience support the terms proposed for our deal with the EU.” Work and Pensions Minister Esther McVey and Northern Ireland Minister Shailesh Vara also resigned this morning, and rumours abound that other ministers might step down as well.

Euphoria over a presumed deal is turning into worries that the agreement might be binned by the end of the year. Even if the EU Parliament approves the terms, the decisive vote will come to the UK Parliament in December 2018. Clearly, the GBP will remain under pressure. Starting the day at 1.30, it is headed to 1.2800 short-term.