"GBP should rebound from current levels with GBPUSD projected to reach 1.2650 as reports suggest the government is considering alternatives to hard Brexit.

The FT reports that the UK may be prepared to keep paying billions to maintain single market access for the City, and reported over the weekend that a foreign car producer in the UK was assured by Mrs May that its export competitiveness would not be hit by the result of Brexit negotiations.

The market is short GBP suggesting that the chance of the UK's government negotiation stance may provide GBP with a temporary rebound. BoE's Carney suggesting that the exchange rate will have an impact on how the BoE's conducts its policy may limit the downside for GBP, for now".

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