The pound has been hit by the leadership challenge to PM Brown. Hard to imagine Labour doing well in the upcoming general elections led by Brown who’s leadership is questioned by his own caucus.
Markets hate uncertainty, and until today it was certain of a Brown/Cameron showdown. Now, it is not so sure. Look for the pound to under-perform against that backdrop.
0.9020/25 is solid resistance in the near-term. The Tuesday top at 0.9020 and a resistance line off the mid-December top at 0.9153 are clustered in that region.
We trade now at 0.8991.
