Earlier, the European Court of Justice ruled the UK can cancel Brexit without the permission of the other 27 EU members. The decision comes a day before MPs were due to vote on Theresa May's deal for leaving the EU – but this could be delayed, judging by the headlines that have emerged.
Meanwhile, UK economic growth has slowed in the three months to the end of October. There was a sharp drop in manufacturing output although this was partly offset by a growth in IT services.
- GDP 0.1% m/m; +0.4% in the three months to the end of October
- Manufacturing output was flat during the three-month period due to a sharp drop in pharmaceutical and transport equipment manufacturing.
- Manufacturing production for October printed -0.9% m/m vs. flat expected
- Construction output -0.2% vs. -0.4%
At the time of writing, the GBP/USD was hitting fresh session lows around 1.2660. As things stand, rates look poised to drop towards the 127.2% Fibonacci extension level around 1.2490 over time, although with the dollar weakening against other currencies, we wouldn’t be surprised if price creates a false break pattern here. After all, the above news was partially priced in.
Source: TradingView and FOREX.com.