The British pound is having a difficult time finding demand. Economists at MUFG Bank note that 1.10 and 0.88 are the key levels to watch in GBP/USD and EUR/GBP, respectively.

UK government remains under pressure to tighten fiscal policy

“If the government fails to fully restore investor confidence quickly, the likelihood of another sharp sell-off for the pound will increase.”

“The pound has held up relatively well at the start of this week while UK bond yields have jumped higher, but that is unlikely to last for long.” 

“The next two important levels to watch are cable at 1.1000 and EUR/GBP at 0.8800.”