UK: Sterling cannot find any traction - BBH

Research Team at BBH, suggests that the sterling cannot find any traction and is extending its losses against the dollar for the fourth consecutive session. 

Key Quotes

“It has fallen in eight of the past 10 sessions.  The euro has risen against sterling for four consecutive sessions also and in nine of the past 10 sessions.  The general direction has been set in motion, not by UK economic data, which continues to surprise on the upside, but by fears that the UK will cut its nose to spite its face.  The newest wrinkle is a potential constitutional challenge as Parliament is insisting that it play a larger role in the Brexit decision than Prime Minister May is prepared to concede. 

A hard exit is thought to be more negative for sterling for a number of reasons, including a greater burden on prices (weaker sterling, higher domestic inflation to adjust the external deficit rather than volume (trade and capital flows).  That said, the selling pressure appears to have abated as the London morning got under way.  Upticks from $1.2280 may extend toward $1.2330-$1.2350.  Note that the low since the flash-crash low was near $1.2230.”