Jane Foley, the senior FX strategist at Rabobank, suggests the UK’s PM is already in murky waters after an accusation in the weekend press of possible abuse of office while Johnson was London Mayor and if the clouds over the PM do thicken further today, GBP will be faced with another political headwind.

• “In terms of Brexit news, the outlook for GBP is still binary. If optimism is extended, EUR/GBP can be expected to push back below the 0.88 level this year. By contrast, if hopes that a deal could still be in place by the end of next month are snuffed out, EUR/GBP could be re-setting its sight on the EUR/GBP 0.90 level and potentially above.
• Our central view is that the Brexit start date will be delayed beyond October 31 in line with the legislation that was pushed through parliament earlier this morning. On this scenario we expect EUR/GBP to be trading in the 0.90 area on a 3-month view.
• If a Brexit deal were struck between the UK and the EU in the coming weeks, we would expect EUR/GBP to recover to the 0.85 area and for GBP/USD to push towards 1.30. If the Supreme Court rules against the PM today, we would expect GBP to lurch lower.”