Talks of the backstop agreement period is causing some nerves for the quid
And that has dragged cable down to a low of 1.3207 on the day now. Ongoing reports of a backstop agreement being open-ended or permanent is evidently causing some uncertainty for the pound. And as traders, we hate uncertainty more than anything else.
As mentioned here, the UK Cabinet discussed the issue overnight and ministers were reportedly dead set against an open-ended period to remain in the customs union and with the EU not willing to budge on that term, it’s making it tough to find common ground on the backstop agreement at this point.
Cable now looks towards testing the 1.3200 handle where bids lie but the key support level in the near-term will be the swing region level close to 1.3180. That helped to limit declines seen in yesterday’s trading and will be an area to watch out for in the session ahead.