Sterling crumbles after Cox says legal risk of Brexit deal remains unchanged
Cable falls by more than 150 pips on the headline
And is headed back towards the 1.3000 handle now where there are some light bids lurking around the level. This is where things start to get interesting because markets will have to consider the risks of a potential no-deal outcome once again.
May's Brexit deal appears to be shot dead on arrival by Cox's legal advice and there isn't much for the pound to work with ahead of the vote later. With overnight sterling implied volatility at its highest levels in 2.5 years, I reckon we could see a further drop in the pound later as May loses the vote.
If price breaks support around 1.2960-70, I would expect a quick trip lower towards 1.2900 and potentially 1.2800 at the end of the day.
The only possible saving grace for the pound now is that lawmakers start touting up chances of a second referendum. Otherwise, it looks like it's going to be one-way traffic for the pound today as odds are currently not in May's favour ahead of the meaningful vote.