The sterling is plunging vs the US dollar on Friday. For now, the currency has hit the bottom since early-September touching the 1.28-handle. Today, the market sees massive sterling selloffs.
First of all, Theresa May's resignation is no longer so pressing one. Still, the no-deal Brexit issue still persists. In particular, the Irish border problem is yet to see the solution, while the UK economy seems to slow down. As a result, the sterling becomes less attractive with the players staying restless.
Additional pressure comes for the general global market environment. The sterling is the risk asset and naturally depressed by the risk aversion in the market on the trade war and weaker oil.
Moreover, it should be also mentioned strong greenback and difference between the monetary policy of the European Central Bank and US Federal Reserve. As for the UK regulator, the BOE is about to hold a meeting next week – the interest rate revision will face away further if the bank downgrades the GDP and inflation outlook.
At present, the sterling-to-US dollar is coming to 1.27, staying at 1.2795, after the break of the support at 1.2785. The sterling can jump when the players switch to profit taking – this may be a good time for new sales.