GBP/USD advances to 1.1960 despite Downing Street’s political play. Still, economists at ING note that the pair could fall as low as 1.15.

Political mayhem leaves GBP very volatile

“It seems unlikely that Prime Minister Boris Johnson will be able to hang onto the keys of Number 10 into next week. This will then prompt a Conservative leadership election and possibly some earlier fiscal stimulus than had been expected. That makes sterling a tricky sell.”

“GBP/USD remains vulnerable to the global recession/equity bear market story – bias to 1.17 maybe 1.15 here – while EUR/GBP looks more volatile in a 0.8550-0.8650 range, where the Bank of England looks more aggressive on tightening than the ECB.”