An ultimatum issued by Jean-Claude Juncker, the head of the European Commission, to the UK Prime Minister, essentially stating that the latest Brexit proposal was the only Brexit proposal Boris Johnson would get, sent Sterling lower against the greenback. Juncker advised that any of Johnson's proposals would be analyzed to gauge its compatibility with the existing agreement to withdraw. Johnson has vowed to renegotiate the terms, as well as the Northern Ireland backstop rules, before the October deadline, but will pull out even if no agreement was reached.
As reported at 11:46 am (GMT) in London, the GBP/USD was trading lower at $1.2324, a loss of 0.4491% and moving away from the session trough of $1.2320, while the peak is a distant $1.2387. The EUR/GBP is trading higher at 0.9025 Pence, gaining 0.4206%; the pair has ranged from a low of 0.89806 Pence to 0.90291 Pence.
Markets Await BoE Decision
Analysts are forecasting that the status quo will be maintained when the Bank of England's Monetary Policy Committee meets on Thursday. The existing 0.75% benchmark lending rate is expected to be unchanged but markets will watch for the Bank's assessment on the economic slowdown as well as the impact of the Brexit to determine whether a future rate cut might later be justified. Markets still expect to see a rate adjustment by mid-2020.